30 JOTUN GROUP 7 INTANGIBLE ASSETS (NOK THOUSAND) DEVELOPMENT COST IT APPLICATIONS TOTAL COST Balance as of 1 January 2015 129 198 312 733 441 931 Additions 27 129 38 164 65 293 Disposals –4 368 –4 452 –8 819 Foreign currency translation effect – 13 175 13 175 Balance as of 31 December 2015 151 959 359 620 511 579 Additions 31 394 72 143 103 538 Disposals –3 806 –1 812 –5 618 Foreign currency translation effect – –13 331 –13 331 Balance as of 31 December 2016 179 548 416 619 596 167 AMORTISATION/IMPAIRMENT Balance as of 1 January 2015 –19 895 –140 528 –160 423 Amortisation –9 656 –23 583 –33 239 Disposals 530 75 604 Foreign currency translation effect – –6 521 –6 521 Balance as of 31 December 2015 –29 022 –170 557 –199 579 Amortisation –11 742 –35 281 –47 023 Disposals – 437 437 Foreign currency translation effect – 14 026 14 026 Balance as of 31 December 2016 –40 764 –191 375 –232 139 NET BOOK VALUE Balance as of 31 December 2016 138 784 225 244 364 028 Balance as of 31 December 2015 122 937 189 063 312 000 Amortisable intangible assets are amortised over the following useful lifetimes: ASSET CATEGORY USEFUL LIFE Development cost 8–10 years Other intangible assets up to 10 years Intangible assets are non-physical assets that have either been capitalised through internal development of products (development cost) or customisation of IT applications. DEVELOPMENT COST Development costs are capitalised if the costs can be measured reliably, the related product or process is technically and commercially feasible, sufficient future economic benefits will be generated and sufficient resources are available to complete the development. The expenditures capitalised include the cost of materials and direct labour. Capitalised development costs are amortised on a straight-line basis. Research and development (R&D) cost that are not eligible for capitalization have been expensed and are recognized in administrative expenses (Note 5). Product development in the Jotun Group is carried out both in the Jotun R&D Centre in Norway, as well as in the regional R&D laboratories in UAE, India, Malaysia, Thailand, South Korea, China, Turkey and USA. The combination of a central and regional R&D set-up is a success factor ensuring both a solid technology platform and necessary local product adaptations. Sustainability is a main driver for new developments in all segments (Decorative Paints, Protective Coatings, Marine Coatings and Powder Coatings). The main focus areas are: –– Reduced energy consumption and carbon footprint during the lifecycle of products and the objects they are applied on. This is achieved by developing highly efficient antifouling concepts, highly durable coatings with the need of less maintenance, optimization of TiO2 usage, and launching low temperature curing powder coatings. –– Reducing VOC emissions through the development of high solid and waterborne alternatives to traditional solvent borne paints. –– Continuously substituting hazardous raw materials with less hazardous alternatives. Recent examples are the global phase out Lead Chromate during 2015 and Cobalt salts during 2016. Within all segments the Jotun Group is committed to serving the markets with high quality products. This is a common denominator for new developments.
Jotun Annual Report 2016
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