19 Intangible assets

2018

 

 

 

€ million

Trademarks, patients and licences

Other

Total

Gross carrying amount at 1 January

2 525

342

2 867

Additions

194

15

209

Disposals

-4

-16

-20

Business Combinations

0

0

0

Transfer from one heading to another

1

20

21

Divestments

-14

-5

-19

Transfer to assets held for sale

0

0

0

Effect of movements in exchange rates

35

2

37

Gross carrying amount at 31 December

2 737

358

3 095

Accumulated amortization and impairment losses at 1 January

-1 837

-213

-2 050

Amortization charge for the year

-136

-34

-170

Disposals

-2

14

12

Impairment losses recognized in the income statement

0

0

0

Transfer from one heading to another

0

0

0

Divestments

13

2

15

Transfer to assets held for sale

0

0

0

Effect of movements in exchange rates

-30

-2

-32

Accumulated amortization and impairment losses at 31 December

-1 992

-233

-2 225

Net carrying amount at 31 December

745

125

870

 

 

 

 

2017

 

 

 

€ million

Trademarks, patients and licences

Other

Total

Gross carrying amount at 1 January

2 278

396

2 674

Additions

73

31

104

Disposals

-3

-15

-18

Business Combinations

5

0

5

Transfer from one heading to another

295

-68

227

Divestments

0

0

0

Transfer to assets held for sale

0

0

0

Effect of movements in exchange rates

-123

-2

-125

Gross carrying amount at 31 December

2 525

342

2 867

Accumulated amortization and impairment losses at 1 January

-1 489

-310

-1 799

Amortization charge for the year

-604

444

-160

Disposals

1

15

16

Impairment losses recognized in the income statement

-1

0

-1

Transfer from one heading to another

163

-366

-203

Divestments

0

0

0

Transfer to assets held for sale

0

0

0

Effect of movements in exchange rates

93

4

97

Accumulated amortization and impairment losses at 31 December

-1 837

-213

-2 050

Net carrying amount at 31 December

688

129

817

 

 

 

 

The Group amortizes all intangible assets once they are placed in service. The amortization of intangible assets is allocated to cost of sales for all intangible assets that are related to compounds. The amortization charges related to software are allocated to the functions that use this software.

The majority of the Group intangible assets arose from previous acquisitions. During 2018, the Group acquired intangible assets totaling € 209 million (2017: € 104 million). These additions are related to in-licensing deals, software and capitalized eligible development costs, the most significant being intranasal midazolam acquired from Proximagen for € 132 million and the final Dermira milestone for € 33 million. There were also additions totaling € 24 million relating to the capitalization of external development expenses for post approval studies.

Disposals in 2018 and 2017 were mainly in respect of software.

During the year, the Group recognized total impairment charges of € 0 million (2017: € 1 million). In 2017 the impairment of € 1 million related to narcotic cough suppressants (€ 6 million) and Metadate® (€ 1 million), offset by the reversal of the impairment on inotuzumab ozomagicin, an out licensed asset, for an amount of € 6 million. The impairment charges are detailed in Note 13 and have been presented in the income statement under the caption “Impairment of non-financial assets”.

Divestments with a net book value of € 4 million relate to the intangibles of UCB Innere Medizin GmbH & Co. KG.

Other intangible assets are primarily comprised of software and in process development projects. The in-process development project assets are not amortized until they are available for use (i.e. when related products are launched for sale) and transferred to the licenses caption.