19 Intangible assets

19 Intangible assets

2019

 

 

 

€ million

Trademarks, patents and licenses

Other

Total

Gross carrying amount at 1 January

2 737

358

3 095

Additions

149

24

173

Disposals

−25

−3

−28

Business Combinations

1

0

1

Transfer from one heading to another

0

17

17

Transfer to Assets Held for Sale

−147

0

−147

Effect of movements in exchange rates

45

1

46

Gross carrying amount at 31 December

2 760

397

3 157

Accumulated amortization and impairment losses at 1 January

−1 992

−233

−2 225

Amortization charge for the year

−155

−35

−190

Disposals

25

1

26

Impairment losses recognized in the income statement

−1

0

−1

Transfer from one heading to another

0

0

0

Transfer to Assets Held for Sale

112

0

112

Effect of movements in exchange rates

−39

−1

−40

Accumulated amortization and impairment losses at 31 December

−2 050

−268

−2 318

Net carrying amount at 31 December

710

129

839

 

 

 

 

2018

 

 

 

€ million

Trademarks, patents and licenses

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

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

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

 

 

 

 

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 2019, the Group acquired intangible assets totaling € 173 million (2018: € 209 million). These additions are related to in-licensing deals, software and capitalized eligible development costs, the most significant being additional milestone payments for the acquisition of Nayzilam® (midazolam) (€ 113 million) upon approval by the FDA in the U.S. There were also additions totaling € 17 million relating to the capitalization of external development expenses for post approval studies.

Disposals in 2019 mainly relate to an old license not used anymore. For 2018, disposals were mainly in respect of software.

During the year, the Group recognized total impairment charges of € 1 million (2018: € 0 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”.

The intellectual property rights relating to non-core established brand products were transferred to assets held for sale (see Note 8.2) as per 31 December 2019.

In 2018, 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.