Unilever 2011 Annual Report Download - page 87

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84
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS UNILEVER GROUP continued
9. Goodwill and intangible assets
Goodwill
Goodwill is initially recognised based on the accounting policy for business combinations, see note 21. Goodwill is subsequently
measured at cost less amounts provided for impairment.
Goodwill acquired in a business combination is allocated to the Group’s cash generating units, or groups of cash generating units,
that are expected to benefit from the synergies of the combination. These might not always be precisely the same as the cash
generating units that the assets or liabilities of the acquired business are assigned to. Each unit or group of units to which the
goodwill is allocated represents the lowest level within the Group at which the goodwill is monitored for internal management
purposes, and is not larger than an operating segment.
Intangible assets
Separately purchased intangible assets are initially measured at cost. On acquisition of new interests in group companies, Unilever
recognises any specifically identifiable intangible assets separately from goodwill. Intangible assets are initially measured at fair
value as at the date of acquisition.
Finite-lived intangible assets mainly comprise patented and non-patented technology, know-how and software. These assets are
capitalised and amortised on a straight-line basis in the income statement over the period of their expected useful lives, or the
period of legal rights if shorter. None of the amortisation periods exceeds ten years.
Indefinite-lived intangibles mainly comprise trademarks and brands. These assets are capitalised at cost but are not amortised.
They are subject to a review for impairment annually, or more frequently if events or circumstances indicate this is necessary. Any
impairment is charged to the income statement as it arises.
Research and development
Development expenditure is capitalised only if the costs can be reliably measured, future economic benefits are probable, the
product is technically feasible and the Group has the intent and the resources to complete the project. Research expenditure is
recognised in profit or loss as incurred.
Movements during 2011
€ million
Goodwill
€ million
Indefinite-
lived
intangible
assets
€ million
Finite-
lived
intangible
assets
€ million
Software
€ million
Total
Cost
1 January 2011 14,150 4,757 644 899 20,450
Acquisitions of group companies 1,677 1,935 15 5 3,632
Disposals of group companies (4) (263) – – (267)
Additions – 8 2 260 270
Disposals – – – (16) (16)
Currency retranslation 106 172 2 4 284
31 December 2011 15,929 6,609 663 1,152 24,353
Amortisation and impairment
1 January 2011 (1,007) (235) (540) (435) (2,217)
Amortisation for the year – – (58) (133) (191)
Disposals –––55
Currency retranslation (26) (10) (3) 2 (37)
31 December 2011 (1,033) (245) (601) (561) (2,440)
Net book value 31 December 2011 14,896 6,364 62 591 21,913
Unilever Annual Report and Accounts 2011
Financial statements