NOTES
78•Consolidated financial statements
PANDORAANNUAL REPORT2014
SECTION 3: INVESTED CAPITAL ANDWORKING CAPITAL ITEMS, CONTINUED
3.1 INTANGIBLEASSETS, CONTINUED
rights are considered to have an indefinite useful life.
Other acquireddistribution rights aremeasuredbased
on theMulti-period Excess Earningsmodel and amortised
over their useful lives.
Other intangible assets
Software ismeasured at cost and amortisedover three years.
Significant accounting estimates
At each reporting date, PANDORA assesseswhether there
is any indication that an asset may be impaired. If any
indication exists, or when annual impairment testing of
an asset is required, PANDORA estimates the recoverable
amount of the asset.
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 individual asset, unless the asset does
not generate cash flows that are independent of those from
other assets or groups of assets.Where the carrying amount
of an asset or CGU exceeds its recoverable amount, the
asset is considered impaired and iswritten 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.
Indetermining fair value less costs to sell, an appropriate
valuationmodel is used.
Goodwill and distribution rights are allocated to five
CGUs: Americas, UK, CentralWestern Europe, Australia
anddistributors & travel retail.The recoverable amount has
beenbased on a calculation of the value in use using cash
flow estimates basedonbudgets and expectations for the
next three years.The long-term growth rate in the terminal
periodhas been set to equal the expected long-term rate of
inflation of 2.0% (2013: 2.0%).
The brand is applied and supported globally in all of
theGroup’s entities.Through common strategy and product
development at Group level andmarketing in the individual
sales entities, the brand ismaintained and preserved.
Therefore, the brand is tested for impairment at Group level.
The calculations of the recoverable amounts of the
CGUs or groups of CGUs are basedon the following key
assumptions:
Discount rates reflect the current market assessment of
the risks specific to eachCGU.TheGroup discount rates
have been estimatedbased on aweighted average cost of
Allocation of intangible assets onCGUs
Other
Distribution
Distribution
intangible
DKKmillion
Goodwill
Brand
network
rights
assets
Total
2014
Americas
605
-
-
1,034
46
1,685
UK
43
-
-
-
-
43
CentralWestern Europe
705
-
-
13
16
734
Australia
482
-
-
-
6
488
Distributors & travel retail
207
-
-
-
13
220
Group
38
1,053
268
-
330
1,689
Total
2,080
1,053
268
1,047
411
4,859
2013
Americas
448
-
-
1,034
22
1,504
UK
36
-
-
-
-
36
CentralWestern Europe
700
-
-
8
18
726
Australia
461
-
-
-
12
473
Distributors & travel retail
226
-
-
-
4
230
Group
33
1,053
300
-
262
1,648
Total
1,904
1,053
300
1,042
318
4,617
