Reebok 2013 Annual Report Download - page 212

adidas Group
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2013 Annual Report
Consolidated Financial Statements
208
2013
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04.8
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Notes
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Notes to the Consolidated Statement of Financial Position
Future changes in expected cash flows and discount rates may lead to impairments of the reported goodwill in
the future. For details see Attachment I to the consolidated financial statements
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SEE STATEMENT OF MOVEMENTS OF
INTANGIBLE AND TANGIBLE ASSETS, P. 238.
The reconciliation of goodwill is as follows:
Reconciliation of goodwill, net
(€ in millions) Wholesale Retail Other
Businesses
Total
January 1, 2013 734 231 316 1,281
Currency translation differences (20) (5) (0) (25)
Impairment losses (23) (29) — (52)
December 31, 2013 691 197 316 1,204
Trademarks and other intangible assets consist of the following:
Trademarks and other intangible assets
(€ in millions) Dec. 31, 2013 Dec. 31, 2012
Reebok 1,123 1,174
Rockport 158 166
Reebok-CCM Hockey 94 99
Other 44 45
Trademarks 1,419 1,484
Software, patents and concessions 720 702
Less: accumulated amortisation and impairment losses 556 535
Other intangible assets 164 167
Trademarks and other intangible assets 1,583 1,651
At December 31, 2013, trademarks, mainly related to the acquisition of Reebok International Ltd. (USA) in 2006
and Ashworth, Inc. in 2008, have indefinite useful lives. This is due to the expectation of permanent use of the
acquired brand names.
The reported other trademarks mainly relate to the brand names Ashworth, Adams Golf and Five Ten.
The Group tests at least on an annual basis whether trademarks with indefinite useful lives are impaired.
This requires an estimation of the fair value less costs to sell of the trademarks. As part of this estimation,
the Group is required to make an estimate of the expected future trademark-specific sales and appropriate
arm’s length notional royalty rates from the cash-generating unit and also to choose a suitable discount rate in
order to calculate the present value of those cash flows. There was no need for impairment for the years ending
December 31, 2013 and 2012.
Future changes in expected cash flows and discount rates may lead to impairments of the accounted
trademarks in the future.
As part of the goodwill impairment test, the Reebok trademark is allocated on a pro-rata basis to the
cash-generating units (or groups of units). Thereof, the major shares relate to Retail CIS (€ 256 million), Retail
North America (€ 196 million), Wholesale North America (€ 147 million), Wholesale Latin America (€ 98 million)
and Wholesale Central Europe (€ 45 million).
Amortisation expenses for intangible assets with definite useful lives were € 52 million and € 49 million for
the years ending December 31, 2013 and 2012, respectively
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SEE NOTE 30.
For details see Attachment I to the consolidated financial statements
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SEE STATEMENT OF MOVEMENTS OF
INTANGIBLE AND TANGIBLE ASSETS, P. 238.
Long-term financial assets primarily include a 9.1% investment in FC Bayern München AG (2012: 9.1%) of
€ 80 million (2012: € 79 million). This investment is classified as “fair value through profit or loss” and recorded
at fair value. This equity security does not have a quoted market price in an active market. Therefore, existing
contractual arrangements were used in order to calculate the fair value as at December 31, 2013.
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Trademarks and other
intangible assets
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Long-term financial
assets