|For the year ended 31 December 2014||Software||Goodwill acquired as a result of|
|Future income from insurance contracts concluded||Relations with customers||Other, including capital expenditure||Total|
|Gross carrying amount at the beginning of the period||3,355,468||347,312||-||-||372,625||4,075,405|
|Increases, of which:||64,954||1,021,074||140,555||86,499||368,145||1,681,227|
|take of control over subsidiaries||40,646||1,021,074||140,555||86,499||9,324||1,298,098|
|Decreases, of which:||(26,239)||(56,426)||-||-||(5,623)||(88,288)|
|classification to non-current assets held for sale||(1,126)||(56,426)||-||-||(710)||(58,262)|
|currency translation differences||(16,348||-||-||-||(249)||(16,597)|
|Transfers from capital expenditure on software||305,779||-||-||-||(305,779)||-|
|Gross carrying amount at the end of the period||3,394,183||1,311,960||140,555||86,499||735,147||5,668,344|
|Accumulated amortisation at the beginning of the period||(1,576,520)||-||-||-||(115,652)||(1,692,172)|
|Increases, of which:||(406,624)||-||(18,253)||(19,247)||(24,314)||(468,438)|
|take of control over subsidiaries||(32,782)||-||-||-||(7,582)||(40,364)|
|amortisation for the period||(373,395)||-||(18,253)||(19,247)||(16,719)||(427,614)|
|Decreases, of which:||10,457||-||-||-||1,036||11,493|
|sale and disposal||203||-||-||-||228||431|
|classification to non-current assets held for sale||843||-||-||-||507||1,350|
|currency translation differences||6,958||-||-||-||23||6,981|
|Accumulated amortisation at the end of the period||(1,972,687)||-||(18,253)||(19,247)||(138,930)||(2,149,117)|
|Impairment allowances at the beginning of the period||(15,373)||(128,462)||-||-||(9,176)||(153,011)|
|Increases, of which:||-||(40,271)||-||-||(796)||(41,067)|
|recognised during the period||-||(40,271)||-||-||(796)||(41,067)|
|Decreases, of which:||-||50,501||-||-||3,851||54,352|
|released during the period||-||-||-||-||3,851||3,851|
|classification to non-current assets held for sale||-||50,501||-||-||-||50,501|
|Impairment allowances at the end of the period||(15,373)||(118,232)||-||-||(6,121)||(139,726)|
|Net carrying amount at the beginning of the period||1,763,575||218,850||-||-||247,797||2,230,222|
|Net carrying amount at the end of the period||1,711,902||1,193,728||122,302||67,252||284,317||3,379,501|
To the Group, a significant item of intangible assets relates to expenditures on the Integrated Information System (ZSI). The cumulative capital expenditures incurred for the ZSI system during the years 2004–2014 amounted to PLN 1 248 875 thousand (during the years 2003–2013, it amounted to PLN 1 265 973 thousand). Net carrying amount of the ZSI amounted to PLN 735 623 thousand as at 31 December 2014 (as at 31 December 2013 it amounted to PLN 731 882 thousand). The expected useful life of the ZSI system is 17 years. As at 31 December 2014, the remaining useful life is 9 years.
The right to manage the fund by the acquisition of OFE POLSAT in 2014 in the net amount of PLN 50 630 thousand is recognised in the position ‘Other, including capital expenditure’ as at 31 December 2014 (in 2013: in the net amount of PLN 61 505 thousand).
|For the year ended 31 December 2013||Software||Goodwill acquired as a result of|
business combinations (including
|Other, including capital expenditure||Total|
|Gross carrying amount at the beginning of the period||2,805,760||347,273||372,986||3,526,019|
|Increases, of which:||33,013||2,337||552,385||587,735|
|Decreases, of which:||(34,937)||-||(727)||(35,664)|
|disposal and sale||(645)||-||(98)||(743)|
|currency translation differences||(1,508)||-||(8)||(1,516)|
|loss of control over a subsidiary||(27,659)||-||-||(27,659)|
|Transfers from capital expenditure on software||551,635||(551,635)||-|
|Classification to non-current assets held for sale||(3)||(2,298)||(384)||(2,685)|
|Gross carrying amount at the end of the period||3,355,468||347,312||372,625||4,075,405|
|Accumulated amortisation at the beginning of the period||(1,344,031)||-||(105,675)||(1,449,706)|
|Increases, of which:||(258,836)||-||(9,074)||(267,910)|
|Decreases, of which:||26,347||-||(903)||25,444|
|disposal and sale||645||-||(846)||(201)|
|currency translation differences||-||-||543||543|
|loss of control over a subsidiary||19,862||-||-||19,862|
|Accumulated amortisation at the end of the period||(1,576,520)||-||(115,652)||(1,692,172)|
|Impairment allowances at the beginning of the period||(15,373)||(124,835)||(2,105)||(142,313)|
|Increases, of which:||-||(3,627)||(7,394)||(11,021)|
|recognised during the period||-||(3,627)||(7,394)||(11,021)|
|Decreases, of which:||-||-||323||323|
|currency translation differences||-||-||9||9|
|Impairment allowances at the end of the period||(15,373)||(128,462)||(9,176)||(153,011)|
|Net carrying amount at the beginning of the period||1,446,356||222,438||265,206||1,934,000|
|Net carrying amount at the end of the period||1,763,575||218,850||247,797||2,230,222|
In 2014 the Group generated internally patents and licences in the amount of PLN 1 404 thousand (PLN 830 thousand in the year 2013). In the period from 1 January 2014 to 31 December 2014, the Group incurred capital expenditures for the purchase of tangible fixed assets and intangible assets in the amount of PLN 716 620 thousand (in the period from 1 January 2013 to 31 December 2013 in the amount of PLN 1 067 323 thousand).
In the years ended 31 December 2014 and 31 December 2013 respectively, there were no restrictions on the Group’s rights to use its intangible assets as a result of pledges.
The table below presents data concerning net goodwill included in the Group’s statement of financial position as at 31 December 2014 and
31 December 2013.
|Nordea Polska’s entities||985,221||-|
|PKO Towarzystwo Funduszy Inwestycyjnych SA||149,564||149,564|
|PKO BP BANKOWY PTE SA||51,158||51,158|
|Qualia spółka z ograniczoną odpowiedzialnością – Nowy Wilanów Sp.k.*||-||10,343|
|Goodwill related to assets acquired from Centrum Finansowe Puławska Sp. z o.o.||7,785||7,785|
* As at 31 December 2014 the Entity is recognised as non-current assets held for sale.
The Group conducted mandatory impairment test on goodwill resulting from the acquisition of Nordea Bank Polska SA in accordance with the model developed on the basis of the guidelines included in IAS 36. Impairment test is carried out by comparing the carrying amount of cash generating units (‘CGU’) and their recoverable amount. CGUs – retail and corporate, to which goodwill resulting from the acquisition of Nordea Bank Polska SA had been assigned were distinguished. The recoverable amount is estimated based on the value in use of CGU. The projection period was extended for the purpose of reflecting a target level of scale of particular CGUs’ operations.
The CGU’s residual value is calculated through the extrapolation of cash flow projections beyond the forecast period, using the growth rate at a level of 1.6%. Cash flow projections are based on the assumptions included in the Bank’s financial objectives for the year 2015, which base on historical data only in the limited range and are not comparable with current business activity due to the fact that only the year 2015 will be the first whole year of functioning of combined organisations. Financial objectives for 2015 are accepted by the Bank’s Management Board. Discount rate in the amount of 7.7%, including a risk-free rate and risk premium was used to discount future cash flows. Value in use is the most sensitive to the discount rate and the growth rate used for the calculation of residual value.
The remaining part of goodwill arose from the acquisition of ‘Nordea Polska Tawarzystwo Ubezpieczeń na Życie SA’ (currently PKO Życie Towarzystwo Ubezpieczeń SA) and the acquisition of Nordea Finance Polska SA. This value was assigned to corporate and investment segment – there are the following cash-generating units: a whole company PKO Życie Towarzystwo Ubezpieczeń SA and a whole company PKO Leasing SA – as a directly superior entity, which acquired assets of Nordea Finance Polska SA within the merger.
The impairment test of PKO Życie Towarzystwo Ubezpieczeń SA was performed based on the present value of expected future cash flows for PKO Bank Polski SA, including the residual value. Future cash flows were estimated on the basis of a 10-year financial forecast prepared by the Company.
The impairment test of PKO Leasing SA was performed based on the present value of expected future cash flows for the period of 5 years, taking into account winding-up of operations after this period, prepared on the basis of financial projections of the Company.
The impairment test of goodwill resulting from the acquisition of PKO Towarzystwo Funduszy Inwestycyjnych SA was performed using the present value of expected future cash flows for a shareholder, prepared by the Company management on the basis of 3-year financial forecast. The test takes into account the 2 variants of cash flows: dividend alone as well as dividend and distribution fee for sale of participation units in funds of PKO Towarzystwo Funduszy Inwestycyjnych SA in PKO Bank Polski SA’s network, in both cases, the residual value is taken into account.
The goodwill impairment test of PKO BP BANKOWY PTE SA was performed using the embedded value method, on the basis of which the value in use of the company’s shares was determined. The key parameters determining the goodwill as at 31 December 2014 were assumptions related to adopted in 2013, and introduced from 1 February 2014 the pension scheme reform, in particular: the transfer on 3 February 2014 of 51.5% of OPFs’ assets to the Social Insurance Institution, the voluntary continuation of transferring a part of pension contribution to OPFs, a retirement slider mechanism and reduced contribution fees. The model has a time horizon of 2065.
The impairment test related to the assets acquired from Centrum Finansowe Puławska Sp. z o.o. was performed based on the fair value measurement in respect of acquired property as a cash-generating unit, to which the goodwill was assigned.