NOTES
Consolidated financial statements •77
SECTION 3: INVESTED CAPITAL ANDWORKING CAPITAL ITEMS, CONTINUED
3.1 INTANGIBLEASSETS, CONTINUED
Goodwill
Goodwill was acquired in connectionwith the acquisitions
of PANDORA JewelryA/S, PANDORA JewelryAmericaApS
(subsequentlymergedwith PANDORAA/S), PANDORA
ProductionCo. Ltd. (Thailand) and PilisarApS on 7March
2008, the acquisition of ADAstraHoldings Pty Ltd. in July
2009 and the acquisition of PANDORA JewelryCentral
Western EuropeA/S in 2010. Additions in 2014mainly
relate to the acquisition of a net total of 22 concept stores
fromUS jeweller Hannoush.
Brand
The brand ‘PANDORA’ is the only brand of theGroup that
is capitalised as an asset in the financial statements. It is
built on a group of complementary intangible assets relating
to the brand, domain name, product, image and customer
experience related to products sold under the PANDORA
brand.The brandwas acquiredwith the PANDORA core
business in2008.
Distribution network
The distribution network covers PANDORA’s relationswith
its distributors.Themain part of the distribution network
was acquiredwith the PANDORA core business in 2008.
Distribution rights
Distribution rights aremainly related to the distribution
rights for PANDORA products inNorthAmerica.Theywere
acquiredwith theAmerican distributor in 2008 and the
carrying amount wasDKK 1,034million at 31December
2014 (2013: DKK1,034million).
Other intangible assets
Other intangible assetsmainly comprise software
implementation projects.
Accounting policies
All intangible assets are tested for impairment at least
annually. Reference ismade to ‘Significant accounting
estimates’ below.
Goodwill
Goodwill is initially recognised at the amount bywhich
the purchase price for a business combination exceeds the
recognised value of the identifiable assets, liabilities and
contingent liabilities. Goodwill comprises future growth
expectations, buyer-specific synergies, theworkforce in
place and know-how. Subsequent to initial recognition,
goodwill ismeasured at cost less accumulated impairment
losses. Goodwill is not amortised, and impairment losses
charged in previous years are not reversed.
Brand
Brand ismeasured basedon the Relief fromRoyalty
method.The brand is considered to have an indefinite
useful life. Basedon the very long future life expected for
the brand, any set timewould be arbitrary.
Distributionnetwork
The distributionnetwork is initially recognised at fair value
based on an estimation of the costs the entity avoids by
owning the intangible assets andnot needing to rebuild it
(the cost approach).The distributionnetwork is amortised
over an expected life of 15 years.
Distribution rights
The distribution rights for PANDORAproducts in theNorth
Americanmarkets aremeasuredbased on a residual model,
since the distribution agreement underlying the distribution
rights is non-terminable. Consequently, the distribution
Carrying amount of recognised goodwill:
DKKmillion
2014
2013
PANDORA core business
1
751
713
PANDORA JewelryAmericaApS, theAmerican distributor
261
231
ADAstraHoldings Pty Ltd., theAustralian distributor
307
295
PANDORA JewelryCentralWestern EuropeA/S, theGerman distributor
602
591
Other distributors
159
74
Total
2,080
1,904
1
PANDORA’s acquisition of all of the voting shares in PANDORA ProductionCo. Ltd. and theDanish companies PopulairA/S andPilisarApS.The companies
comprise theDanish headquarters and theThai crafting facilities.
