Groupe Renault - 2020 Universal Registration Document

04

CONSOLIDATED FINANCIAL STATEMENTS FINANCIAL STATEMENTS

Operating assets and liabilities, shareholders’ equity

4.2.6.4

INTANGIBLE ASSETS AND PROPERTY, PLANT AND EQUIPMENT NOTE 10

Intangible assets and goodwill 10 - A - Changes in intangible assets and goodwill A1 Changes in 2020 in intangible assets were as follows:

Acquisitions/ (amortization and impairment)

Change in scope of consolidation and other

December 31, 2020

December 31, 2019

(Disposals)/ reversals

Translation adjustment

(€ million)

Capitalized development expenses

11,613

1,390

(1) (5)

(56)

30 21 33 84 (3) (6) (8) 27 15 34 76 1

12,976

Goodwill

1,151 1,160

-

(221)

946

Other intangible assets Intangible assets, gross

110

(17) (23)

(56)

1,230

13,924 (6,134)

1,500

(333)

15,152 (7,861)

Capitalized development expenses

(1,742)

1

17

Goodwill

(24)

-

-

-

(30)

Other intangible assets

(817)

(138)

22 23

18 35

(914)

Amortization and impairment Capitalized development expenses

(6,975)

(1,880)

(8,805)

5,479 1,127

(352)

-

(39)

5,115

Goodwill

-

(5)

(221)

916 316

Other intangible assets INTANGIBLE ASSETS, NET

343

(28)

5

(38)

6,949

(380)

-

(298)

6,347

Most goodwill is located in Europe and Eurasia. Acquisitions of intangible assets in 2020 comprise €1,390 million of self-produced assets and €110 million of purchased assets (respectively €1,985 million and €101 million in 2019).

In 2020, amortization and impairment of intangible assets include €565 million of impairment concerning vehicles (including components), compared to €206 million of impairment in 2019 (note 6-C).

Changes in 2019 in intangible assets were as follows:

Gross value

Amortization and impairment

Net value

(€ million)

Value at December 31, 2018

11,711

(5,798) (1,256)

5,913

Acquisitions/(amortization and impairment)*

2,086

830

(Disposals)/reversals Translation adjustment

(83) 149

83 (4)

-

145

Change in scope of consolidation and other

61

-

61

6,949

Value at December 31, 2019

13,924

(6,975)

* Including impairment of -€206 million concerning intangible assets.

Research and development expenses included in income A2 (€ million)

2020

2019

Research and development expenses Capitalized development expenses

(2,749)

(3,697)

1,390

1,985 (946)

Amortization of capitalized development expenses

(1,210) (2,569)

TOTAL INCLUDED IN INCOME

(2,658)

Research and development expenses are reported net of research tax credits for the vehicle development activity. The decrease in research and development expenses over 2020 is explained by the end of an initial cycle of upgrades to the product range, the lower level of business, and actions to reduce fixed costs, which focused particularly on subcontracting and purchases of prototypes.

This decrease was accentuated by the COVID-19 pandemic, although it did not significantly affect the level of capitalized development expenses under the rules set out in IAS 38. The lower level of capitalized development expenses is notably attributable to deferral of certain technical milestones from which development expenses are capitalized. Amortization was substantially higher in 2020 than 2019, due to the higher level of capitalized development expenses in 2018 and particularly in 2019.

372 GROUPE RENAULT I UNIVERSAL REGISTRATION DOCUMENT 2020

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