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Intangible Assets
Delhaize Group Annual Report 2014 83
None of the Group entities has the currency of a hyper-inflationary economy nor does Delhaize Group currently hedge net
investments in foreign operations.
(in
Country
Closing Rate
Average Daily Rate
2014
2013
2012
2014
2013
2012
1 USD
U.S.
0.823655
0.725111
0.757920
0.752729
0.752955
0.778331
1 GBP
United Kingdom
1.283862
1.251564
100 RON
Romania
22.307486
22.366361
22.499719
22.503769
22.629554
22.425044
100 RSD
Serbia
0.826720
0.872296
0.879353
0.852442
0.883861
0.883939
100 ALL
Albania
0.713572
0.713267
0.716384
0.714439
0.712911
0.719373
100 IDR
Indonesia
0.006633
0.005965
0.007865
0.006350
0.007217
0.008302
The Bulgarian lev (BGN) and the Bosnian marka (BAM) are fixed currencies and translate at 0.511292 into euro.
Intangible assets include trade names, customer relationships and favorable lease rights that have been acquired in business
combinations (unfavorable lease rights are recognized as "Other liabilities" and released on a straight line basis), computer
software, various licenses and prescription files separately acquired. Separately acquired intangible assets are initially
recognized at cost, while intangible assets acquired as part of a business combination are measured initially at fair value (see
"Business Combinations and Goodwill"). Intangible assets acquired as part of a business c ombination that are held to prevent
others from using them ("defensive assets") - often being brands with no intended future usage - are recognized separately from
goodwill. Such assets are amortized over the expected useful life, which will depend on the facts and circumstances surrounding
the specific defensive asset.
Expenditures on advertising or promotional activities, training activities and start-up activities, and on relocating or reorganizing
part or all of an entity are recognized as an expense as incurred, i.e., when Delhaize Group has access to the goods or has
received the services in accordance with the underlying contract.
Costs associated with maintaining computer software programs are recognized as an expense as incurred. Development costs
that are directly attributable to the design and testing of identifiable and unique "for-own-use software" controlled by the Group
are recognized as intangible assets when the following criteria are met:
it is technically feasible to complete the software product so that it will be available for use;
management intends to complete the software product and use it;
there is an ability to use the software product;
it can be demonstrated how the software product will generate probable future economic benefits;
adequate technical, financial and other resources to complete the development and to use the software product are
available; and
the expenditure attributable to the software product during its development can be reliably measured.
Directly attributable costs capitalized as part of the software product include software development employee costs and directly
attributable overhead costs. Other development expenditures that do not meet these criteria are recognized as an expense as
incurred. Development costs recognized in a previous reporting period as an expense are not recognized as an asset in a
subsequent period.
Intangible assets are subsequently carried at cost less accumulated amortization and accumulated impairment losses.
Amortization begins when the asset is available for use as intended by management. Residual values of intangible assets are
assumed to be zero and are reviewed at each financial year-end.
Intangible assets with finite lives are amortized on a straight-line basis over their estimated useful lives. The useful lives of
intangible assets with finite lives are reviewed annually and are as follows:
Trade names indefinite
Developed and purchased software 3 to 8 years
Favorable lease rights remaining lease term
Customer relationships 5 to 20 years
Prescription files 15 years
Other intangible assets 3 to 15 years
Intangible assets with indefinite useful lives are not amortized, but are tested for impairment annually and when there is an
indication that the asset may be impaired. The Group believes that acquired and used trade names have indefinite lives because
they contribute directly to the Group's cash flows as a result of recognition by the customer of each banner's characteristic s in
the marketplace.
