Supercuts 2010 Annual Report Download - page 168

PROVALLIANCE SAS
CONSOLIDATED FINANCIAL STATEMETS
DECEMBER 31, 2009 AND 2008
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(INFORMATION AS OF DECEMBER 31, 2009 AND FOR THE YEAR THEN ENDED NOT
COVERED BY AUDITORS' REPORT INCLUDED HEREIN)
1.1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
These trademarks were recognized at fair value based on the expected profit to be generated through their related licenses and franchise
network.
Trademarks are amortized over the following periods:
• Jean-Louis David and Saint-Algue: 25 years
• Coiff & Co, Intermède and City-Look: 20 years
In addition, where there is an indication that the value of a trademark may be impaired it is tested for impairment in accordance with the
principles described in Note 1.1.6 "Impairment of non-current assets".
As trademarks correspond to identifiable assets, they give rise to a deferred tax liability.
1.1.4.4 Franchise networks
Franchise agreements acquired as part of a business combination are measured based on the expected future cash flows to be generated by
the franchise network, less the value of the brand and taking into account the probability of renewal of agreements reaching maturity.
Franchise networks are amortized over 15 years.
As franchise networks correspond to identifiable assets they give rise to a deferred tax liability.
1.1.4.5 Other intangible assets
The Group has not capitalized any development costs.
Other intangible assets—notably software acquired for internal use—are amortized over their estimated useful lives, which generally
correspond to three years. In the income statement, amortization expense is recorded as an operating expense under the line "Depreciation,
amortization and impairment".
Other intangible assets are carried at cost less accumulated amortization and any accumulated impairment losses.
1.1.5 Property, plant and equipment
The Group has opted to apply the cost model rather than the revaluation model for measuring property, plant and equipment.
Consequently, property, plant and equipment are stated at cost less accumulated depreciation and any accumulated impairment losses. In
accordance with IAS 23, borrowing costs are not included in the cost of property, plant and equipment.
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