technicolor - 2018 Registration document

6 FINANCIAL STATEMENTS

NOTE 4 GOODWILL, INTANGIBLE & TANGIBLE ASSETS

Intangible assets

4.2

administrative expenses”, “Other income (expense)” or “Research and development expenses”. Intangible assets with indefinite useful lives are not amortized but are attached to Goodwill Reporting Unit (GRU) and tested for

Intangible assets consist mainly of trademarks, rights for use of patents, capitalized development projects and acquired customer relationships. Intangibles acquired through a business combination are recognized at fair value at the transaction date. For material amounts, Technicolor relies on independent appraisals to determine the fair value of intangible assets. Separately acquired intangible assets are recorded at purchase cost and internally generated intangibles are recognized at production cost. Purchase cost comprises acquisition price plus all associated costs related to the acquisition and set-up. All other costs, including those related to the development of internally generated intangible assets such as brands, customer files, etc., are recognized as expenses of the period when they are incurred. Intangible assets considered to have a finite useful life are amortized over their estimated useful lives and their value written down in the case of any impairment loss. Depending on the nature and the use of the intangible assets, the amortization of these assets is included either in “Cost of sales”, “Selling and

impairment annually (see note 4.4). ACCOUNTING ESTIMATES AND JUDGMENTS

Regarding intangible assets with finite useful lives, significant estimates and assumptions are required to determine (i) the expected useful life of these assets for purpose of their depreciation and (ii) whether there is an impairment of their value requiring a write-down of their carrying amount. Estimates that are used to determine their expected useful lives are defined in the Group’s accounting policy manual and consistently applied throughout the Group. Regarding intangible assets with indefinite useful lives, significant estimates and assumptions are required to determine the recoverable amount of such assets. See section 4.4. for detail on the accounting policy related to impairment review on such assets.

Patents & Customer Relationships

Total Intangible Assets

Other intangibles

Trademarks

(in million euros)

At December 31, 2016,

275 282

353 989

143 342

771

Cost

1,613 (842)

Accumulated depreciation Exchange differences Acquisitions of businesses

(7)

(636)

(199)

(27)

(30)

(10)

(67)

- - - - - -

2

1

3

Additions Disposals

- -

75

75

-

-

Depreciation charge

(58)

(79)

(137)

Impairment loss (see note 4.4)

(6) (7)

(7)

(13)

Other (1)

-

(7)

At December 31, 2017, Net,

248 255

254 642

123 389

625

Cost

1,286 (661)

Accumulated depreciation Exchange differences

(7)

(388)

(266)

9

9

2

20 89 93 (1)

Disposal of activities

- - - - - -

89

-

Additions Disposal

3

90 (1)

-

Depreciation charge

(54)

(82)

(136)

Impairment loss (see note 4.4)

(5)

(1) 15

(6)

6

21

Other (1)

AT DECEMBER 31, 2018, NET,

257 264

302

146 455

705

Cost

710

1,429 (724)

Accumulated depreciation

(7)

(408)

(309)

Includes patents transferred to assets held for sale. (1)

196

TECHNICOLOR REGISTRATION DOCUMENT 2018