3.2 Intangible assets
Intangible assets are non-physical assets that
have either been capitalised through internal
development of products (development cost),
customisation of IT applications or separate
acquisitions.
Territorial rights to the Qatari market were acquired
by Jotun A/S from Jotun U.A.E. Ltd. (LLC) for NOK
237 million. After eliminations, NOK 138 million
has been capitalised as intangible assets.
Accounting policy
Intangible assets are measured at cost, net of
accumulated amortisation and accumulated
impairment losses.
Amortisation of intangible assets with limited
economic lives are calculated on a straight-line
basis over the estimated useful life. The
amortisation method and period are assessed at
least once a year. Changes to the amortisation
method and/or period are accounted for as
a change in estimate. Intangible assets with
unlimited useful lives are not amortised but tested
for impairment annually. The methodology for
impairment testing is described in Note 3.3.
All intellectual property rights are owned by Jotun
A/S. Development costs are capitalised only if the
product is technically and commercially feasible and
the business case demonstrates a probability for
future economic benefit. Capitalised development
costs mainly include internal payroll costs in
addition to purchased materials and services
used in the development programs. Amortisation
of assets with limited useful life begins when
development is complete, and the asset is available
for use.
(NOK THOUSAND) Development cost
Back to Notes for the Group
IT applications and
other intangibles Total
Cost
Balance as of 1 January 2018 237 056 493 178 730 234
Additions 86 298 91 444 177 742
Disposals - -9 784 -9 784
Reclassifications 292 -16 065 -15 773
Foreign currency translation effect - -247 -247
Balance as of 31 December 2018 323 646 558 525 882 171
Additions 77 242 210 814 288 057
Disposals - -498 -498
Reclassifications -5 641 -19 221 -24 863
Foreign currency translation effect - 5 548 5 548
Balance as of 31 December 2019 395 247 755 168 1 150 416
Amortisation and impairment
Balance as of 1 January 2018 -53 662 -246 203 -299 866
Amortisation -15 800 -47 337 -63 138
Disposals - 8 196 8 196
Reclassifications -292 -1 921 -2 213
Foreign currency translation effect - -1 842 -1 841
Balance as of 31 December 2018 -69 754 -289 107 -358 861
Amortisation -17 848 -53 797 -71 645
Disposals - 363 363
Reclassifications - -3 907 -3 907
Foreign currency translation effect - -3 924 -3 924
Balance as of 31 December 2019 -87 602 -350 373 -437 975
Net book value
Balance as of 31 December 2019 307 645 404 796 712 441
Balance as of 31 December 2018 253 892 269 418 523 310
Estimated useful life 8-10 years 3-8 years
JOTUN GROUP
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