PERNOD RICARD - Universal Registration Document 2019-2020

6. CONSOLIDATED FINANCIAL STATEMENTS Notes to the consolidated financial statements

Notes to the balance sheet NOTE 4 Intangible assets and goodwill Note 4.1

Intangible assets are measured at cost on initial recognition. With the exception of assets with indefinite useful lives, they are amortised on a straight-line basis over their period of use, which is generally less than five years, and are written down when their recoverable amount is less than their net carrying amount. Amortisation of intangible assets is recognised within operating profit in the income statement. In the context of the Group’s activities, and in accordance with IAS 38 (Intangible assets), research and development costs are recognised as expenses in the financial year during which they are incurred, except for certain development costs which meet the capitalisation criteria described by the standard.

Movements in the year

Translation adjustments

Other movements 30.06.2019

30.06.2018 Acquisitions Allowances Disposals

€ million

Goodwill

5,456

8

-

(4)

71

(3)

5,528

Brands

12,757

62

-

(34)

169

3

12,957

Other intangible assets

407

42

-

(8)

3

8

452

GROSS VALUE

18,620

112

-

(45)

243

8

18,937

Goodwill

(137)

-

-

-

0

0

(137)

Brands

(1,334)

-

(65)

15

(24)

-

(1,408)

Other intangible assets

(291)

-

(30)

6

(2)

(1)

(318)

AMORTISATION/IMPAIRMENT INTANGIBLE ASSETS, NET

(1,762) 16,858

-

(95) (95)

21

(26)

(1)

(1,863) 17,074

112

(25)

217

7

Movements in the year

Translation adjustments

Other movements 30.06.2020

30.06.2019 Acquisitions Allowances Disposals

€ million

Goodwill

5,528

199

-

(1)

21

0

5,747

Brands

12,957

227

-

0

47

0

13,230

Other intangible assets

452

41

-

(20)

(7)

5

471

GROSS VALUE

18,937

467

-

(21)

60

5

19,448

Goodwill

(137)

-

-

-

1

0

(136)

Brands

(1,408)

-

(999)

0

9

0

(2,398)

Other intangible assets

(318)

-

(34)

10

6

(1)

(338)

AMORTISATION/IMPAIRMENT INTANGIBLE ASSETS, NET

(1,863) 17,074

-

(1,033) (1,033)

10

16

(1)

(2,872) 16,576

467

(11)

76

4

Goodwill

Goodwill is subject to an impairment test at least once a year and whenever there is an indication that its value may have been impaired. To perform these tests, goodwill is allocated by geographical area on the basis of asset groupings at the date of each business combination. These asset groupings correspond to groups of assets which jointly generate identifiable cash flows that are largely independent. If impairment is identified, an impairment loss is recognised in profit and loss for the financial year. Goodwill mainly stems from the acquisitions of Allied Domecq in July 2005 and Vin&Sprit in July 2008. The increase in the value of goodwill for the period was mainly due to the acquisitions mentioned in Note 1.2.1 – Significant events during the financial year – Acquisitions and disposals , as well as currency fluctuations.

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Pernod Ricard Universal Registration Document 2019-2020