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NOTES
Consolidated financial statements • 95
SECTION 3: INVESTED CAPITAL AND WORKING CAPITAL ITEMS, CONTINUED
3.1 INTANGIBLE ASSETS, CONTINUED
Other intangible assets
Software is measured at cost and amortised over 3-5 years. Key
money is measured at cost and amortised over the term of the
contract. Contracts that are considered to have an indefinite
term are not amortised, but are tested for impairment.
Impairment
At each reporting date, PANDORA assesses whether there
is any indication that an asset may be impaired. If any such
indication exists, or when annual impairment testing of
an asset is required, PANDORA estimates the recoverable
amount of the asset.
The most significant factors when assessing the potential
need for write-downs are:
• decreasing revenue
• decreasing brand value
• changes to the product mix.
The indicators above should be viewed in the context of
PANDORA’s relatively high margins and low asset base.
The recoverable amount of an asset is the higher of the
fair value of the asset or cash-generating unit (CGU) less
costs to sell and its value in use. The recoverable amount
is determined for the smallest group of assets that are
independent from other assets or groups of assets. Where the
carrying amount of an asset or CGU exceeds its recoverable
amount, the asset is written down to its recoverable amount.
In assessing the value in use, the estimated future cash
flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of
the time value of money and the risks specific to the asset.
In determining fair value less costs to sell, an appropriate
valuation model is used.
Allocation of intangible assets to CGUs
Other
Distribution
Distribution
intangible
DKK million
Goodwill
Brand
network
rights
assets
Total
2016
US and Caribbean
651
-
-
1,034
44
1,729
Other Americas
41
-
-
-
29
70
Americas
692
-
-
1,034
73
1,799
Northern Europe
930
-
-
13
119
1,062
Other EMEA
176
-
-
-
116
292
EMEA
1,106
-
-
13
235
1,354
Asia
225
-
-
14
6
245
Pacific
497
-
-
-
3
500
Asia Pacific
722
-
-
14
9
745
Group
51
1,057
184
-
576
1,868
Total
2,571
1,057
184
1,061
893
5,766
2015
North America
652
-
-
1,034
41
1,727
South America
22
-
-
-
17
39
Americas
674
-
-
1,034
58
1,766
Western Europe
117
-
-
-
59
176
Central Western Europe
712
-
1
13
161
887
Central Eastern Europe
57
-
-
-
8
65
Distributors & Travel retail
218
-
-
-
3
221
EMEA
1,104
-
1
13
231
1,349
Asia
117
-
-
22
3
142
Pacific
490
-
-
-
3
493
Asia Pacific
607
-
-
22
6
635
Group
39
1,057
215
-
388
1,699
Total
2,424
1,057
216
1,069
683
5,449