Fiven Annual Report 2020

carried at cost. The costs of intangible assets acquired through an acquisition are recognized at their fair value in the Group’s opening balance sheet. Capitalized intangible assets are recognized at cost less any amortization and impairment losses. Internally generated intangible assets, excluding capitalized development costs, are not capitalized but are expensed as occurred. The economic life is either definite or indefinite. Intangible assets with a definite economic life are amortized over their economic life and tested for impairment if there are any indications. The amortization method and period are assessed at least once a year. Changes to the amortization method and/ or period are accounted for as a change in estimate. Intangible assets with an indefinite economic life are tested for impairment at least once a year, either individually or as a part of a cash-generating unit. Intangible assets with an indefinite economic life are not amortized. The economic life is assessed annually with regard to whether the assumption of an indefi- nite economic life can be justified. If it cannot, the change to a definite economic life is made prospectively. Technologies Technology purchased, or acquired in a business combination are recognized at fair value at the acquisition date. In the acquisition from Saint-Gobain 1 May 2019 Fiven acquired four main technologies: • Metallurgy products technology • Refractories products technology • Abrasives products technology • Customized product technology The technologies have a definite useful life and are carried at cost less accumulated amortization. Amortization is calculated using the straight-line method over the expected life of the technologies. The expected useful life ranges from 5 to 20 years. Customer relationships Customer relationships purchased, or acquired in a business combination are recognized at fair value at the acquisition date. The customer relations have a definite useful life and are carried at cost less accumulated amortization. Amortization is calculated using the straight-line method over the expected life of the customer relationship. Trademark In the acquisition from Saint-Gobain 1 May 2019 Fiven acquired the trademark “Sika”. All Fiven products are sold using this brand. The trademark has an indefinite useful life and is not amortized, but is tested annually for impairment. Patents and licenses Amounts paid for patents and licenses are capitalized and amortized in a straight line over the expected useful life. Patents acquired in the acquisition from Saint-Gobain are included in the fair value of the acquired technologies. Software Expenses linked to the purchase of new computer software are capitalized as an intangible asset provided these expenses do not form part of the hardware acquisition costs. Software is normally depreciated on a straight-line basis over three years. Costs incurred as a result of maintaining or upholding the future utility of software is expensed unless the changes in the software increase the future economic benefits from the software. Leases Identifying a lease At the inception of a contract, The Group assesses whether the contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The Group as a lessee Separating components in the lease contract For contracts that constitute, or contain a lease, the Group separates lease components if it benefits from the use of each underlying asset either on its own or together with other resources that are readily available, and the underlying asset is neither highly dependent on, nor highly interrelated with, the other underlying assets in the contract. The Group then accounts for each lease component within the contract as a lease separately from non-lease components of the contract. Recognition of leases and exemptions At the lease commencement date, the Group recognizes a lease liability and corresponding right-of-use asset for all lease agreements in which it is the lessee, except for the following exemptions applied: • Short-term leases (defined as 12 months or less) • Low- value assets For these leases, the Group recognizes the lease payments as other operating expenses in the statement of profit or loss when they incur. Fiven Annual Report 2020 Financial statements   35