5.5 Intangible assets

Intangible assets are recognized when they are identifiable, controlled and it is possible that the future economic benefits that are attributable to the assets will flow to the entity and it is possible to reliably measure the cost of the asset, with expected useful life longer than one year.

Intangible assets are measured at costs less accumulated amortisation and impairment losses.

The method applied to determine the fair value of intangible assets acquired in a business combination has been presented in Note 5.4.

Intangible assets include in particular: software, copyright, licences, concessions, as well as assets acquired as a result of business combination transactions: trademarks, customer relations, broker relations, future profits from concluded insurance contracts etc.

Intangible assets are subject to amortisation over their estimated useful life:

  • intangible assets other than intangible assets acquired in a business combination - using the straight line method over the period of two to five years. If appropriate, following a case-by-case analysis, the entity may apply another amortisation rate suitable for the estimated useful life of the intangible asset. As the main product system is planned to be used by PZU for 10 years, the adopted annual amortisation rate amounts to 10%;
  • intangible assets acquired in a business combination (except for acquired trademarks) – over the period from one to thirteen years., on the basis of the profits generated in particular years;
  • trademarks acquired in a business combination are intangible assets with an indefinite useful life and are not subject to amortisation; instead, they are subject to the impairment test at the end of each financial year and each and every time when impairment indications occur.

Amortisation is charged under “Other operating costs” in the consolidated statement of profit or loss.