LensCrafters 2015 Annual Report Download - page 101

Notes to the consolidated financial statement as of December 31, 2015 Page 7 di 68
Each finance lease payment is allocated between the liability and finance charges. The corresponding rental obligations, net of
finance charges, are included in “long-term debt” in the consolidated statement of financial position. The interest element of the
finance cost is charged to the consolidated statement of income over the lease period. The assets acquired under finance leases
are depreciated over the shorter of the useful life of the asset and the lease term.
Intangible assets
(a) Goodwill
Goodwill represents the excess of the cost of an acquisition over the fair value of the Group’s share of the net identifiable assets
of the acquired subsidiary at the date of acquisition. Goodwill is tested at least annually for impairment and carried at cost less
accumulated impairment losses. Impairment losses on goodwill are not reversed. Gains and losses on the disposal of an entity
include the carrying amount of goodwill relating to the entity sold.
(b) Trademarks and other intangible assets
Separately acquired trademarks and licenses are shown at historical cost. Trademarks, licenses and other intangible assets,
including distribution networks and franchisee agreements, acquired in a business combination are recognized at fair value at
the acquisition date. Trademarks and licenses have a finite useful life and are carried at cost less accumulated amortization and
accumulated impairment losses. Amortization is calculated using the straight-line method to allocate the cost of trademarks and
licenses over their estimated useful lives.
Contractual customer relationships acquired in a business combination are recognized at fair value at the acquisition date. The
contractual customer relations have a finite useful life and are carried at cost less accumulated amortization and accumulated
impairment losses. Amortization is recognized over the expected life of the customer relationship.
All intangible assets are subject to impairment tests, as required by IAS 36—Impairment of Assets, if there are indications that
the assets may be impaired.
Trademarks are amortized on a straight-line basis over periods ranging between 15 and 25 years. Distributor network,
contractual customer relationships and lists are amortized on a straight-line basis or on an accelerated basis (projecting
diminishing cash flows) over periods ranging between 20 and 23 years. Other intangible assets are amortized on a straight-line
basis over periods ranging between 3 and 7 years.
Impairment of assets
Intangible assets with an indefinite useful life, for example goodwill, are not subject to amortization and are tested at least
annually for impairment.
All other assets within the scope of IAS 36 are tested for impairment whenever there are indicators that those assets may be
impaired. If such indicators exist, the assets’ net carrying amount is compared to their estimated recoverable amount. An
impairment loss is recognized if the carrying amount is lower than the recoverable amount.
Tangible assets and intangible assets with a definite useful life are subject to amortization and are reviewed for impairment
whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is