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4.1 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 9. Intangible assets
DANONE
REGISTRATION DOCUMENT 2015
114
Note 8.3. Tax loss carryforwards
Accounting principles
Deferred tax assets relating to tax loss carryforwards and temporary
differences are recognized in the consolidated balance sheet when
it is more likely than not that these taxes will be recovered. At each
closing, the Group reviews the unused tax losses and the amount
of deferred tax assets recognized on the balance sheet. In some
countries in which losses can be carried forward indefinitely, the
Group takes into consideration long-term recovery horizons when
justified in light of forecast taxable profits.
Carrying amount
As of December 31
(in € millions)
2014
2015
Tax losses – recognized portion
Recognized tax loss carryforwards
(a) (b)
1,630
1,569
Tax savings
(c)
533
516
Tax losses – unrecognized portion
Tax loss carryforwards and tax credits not yet used
(a)
403
480
Potential tax savings
107
130
(a) Basis amount.
(b) In 2015, they mainly come from the French consolidated tax group. The decrease relative to 2014 wasmainly due to impairment of tax assets related to Dumex.
(c) Corresponds to deferred tax assets based on tax loss carryforwards.
Consumption horizon
Most of the tax losses as of December 31, 2015 can be carried forward indefinitely and have a probable consumption horizon of more
than five years.
NOTE 9. INTANGIBLE ASSETS
Note 9.1. Accounting principles
Goodwill
When control of a company is acquired, the fair value of the consi-
deration given to the seller is allocated to the acquired identified
assets and the liabilities and contingent liabilities assumed, which
are measured at fair value. The difference between the considera-
tion given to the seller and the Group's share of the fair value of the
acquired identified assets and the liabilities and contingent liabili-
ties assumed represents goodwill. When the option of recognizing
non-controlling interests at fair value is applied, a corresponding
premium is allocated to goodwill. Goodwill is recognized in the
consolidated balance sheet as an asset under the heading Goodwill.
Goodwill arising from the acquisition of a foreign entity is recognized
in the functional currency of the entity acquired and translated at
the exchange rates prevailing on the closing date.
Goodwill is not amortized but is tested for impairment at least annually.
For the purposes of impairment testing, goodwill is allocated to
the Cash generating units (CGU) or groups of CGUs most likely
to benefit from the synergies of the business combination and to
the lowest level at which goodwill is monitored by the Group. The
CGUs correspond to subsidiaries or groups of subsidiaries that are
included in the same Division and that generate cash flows largely
independent from those generated by other CGUs.
Brands with indefinite useful lives
Acquired brands that are distinguishable, having a significant value,
are supported by advertising expense and have indefinite useful lives
are recorded under the heading Brands in the consolidated balance
sheet. The valuation of these brands is generally determined with
the assistance of valuation specialists, taking into account various
factors, including brand awareness and their contribution to ear-
nings. These brands, which are legally protected, are not amortized
but are tested for impairment annually or more frequently if signs
of impairment exist (see hereafter).