FINANCIAL AND ACCOUNTING INFORMATION arising on consol idation are translated into Impairment losses in respect of goodwill may not be euro at foreign exchange rates prevail ing at the reversed. balance sheet date. The revenues and expenses of foreign operations are translated into euro When goodwil l is al located to a cash-generating at rates approximating the foreign exchange unit (or group of cash-generating units) and part rates rul ing at the dates of the transactions. Al l of the operation within that unit is disposed of, the resulting translation differences are recognized as goodwill associated with the operation disposed of a separate component of equity (foreign currency is included in the carrying amount of the operation translation reserve). when determining the gain or loss on disposal of the operation. Goodwill disposed of in this circumstance Net investment in foreign operations is measured based on the relative values of the operation disposed of and the portion of the cash- Exchange differences arising from the translation of generating unit retained. the net investment in foreign operations are taken to the foreign currency translation reserve. When a Other intangible assets foreign operation is sold, such exchange differences Intangible assets other than goodwill are stated at are recognized in the income statement as part of cost less accumulated amortization (see below) and the gain or loss on disposal. impairment losses. 3.5 Intangible assets Identifiable intangible assets existing at the date of acquisition in a business combination are recognized Goodwill as part of the purchase accounting and measured at fair value. Intangible assets are considered The cost of an acquisition is measured at identifiable if they arise from contractual or legal acquisition date. Any contingent considerations rights or are separable. are recognized at their fair value estimated as 5 of the acquisition date. Subsequent changes in Amortization the fair value of contingent considerations are recognized in the income statement. For each Amortization is charged to profit or loss on a business combination, the Group measures the straight-line basis over the estimated useful lives non-control l ing interests either at fair value or of intangible assets unless such lives are indefinite. at the proportionate share of the acquiree’s Intangible assets with an indefinite useful life are identifiable net assets. The costs of acquisition are tested for impairment at each annual balance sheet recognized as expenses. date, at least. The useful life of an intangible asset with an indefinite useful life is reviewed annual ly At the acquisition date, any excess of the to determine whether the assessment of indefinite consideration transferred and the non-control ling useful life for this asset continues to be justified. interests over the fair value of the net assets acquired If not, a change in the useful life assessment from is allocated to goodwill. indefinite to finite is made on a prospective basis. Other intangible assets are amortized from the date Goodwi l lis then measured at cost less any that they are available for use. Estimated useful lives accumulated impairment losses. Goodwi l l is of capitalized software development costs range allocated to cash-generating units (CGUs). from 3 to 10 years. Goodwi l lis not amortized but subject to an 3.6 Property, plant and equipment impairment test, as soon as there is an indication that it may be impaired, and at least once a year. Owned assets Indications that goodwil l may be impaired include Items of property, plant and equipment are stated at material adverse changes of a lasting nature affecting cost less accumulated depreciation (see below) and the economic environment or the assumptions and impairment losses. objectives made at the time of acquisition. A goodwill impairment loss is recognized whenever Leased assets the carrying amount of the cash-generating unit Lease contracts which substantially transfer to the exceeds its recoverable amount. Impairment losses Group al l of the risks and rewards of ownership are recognized in the income statement (in “Other are classified as finance leases. All other leases are expenses”). classified as operating leases. REXEL 2017 – REGISTRATION DOCUMENT 223