3.2 INTANGIBLE ASSETS
Intangible assets are non-physical assets that have either
been capitalised through internal development of products
(development cost), customisation of IT applications or
separate acquisitions.
Accounting policy
Intangible assets are measured at cost, net of accumulated
amortisation and accumulated impairment losses.
Amortisation of intangible assets with limited economic lives
are calculated on a straight-line basis over the estimated
useful life. The amortisation method and period are assessed
at least once a year. Changes to the amortisation method
and/or period are accounted for as a change in estimate.
Intangible assets with unlimited useful lives are not amortised
but tested for impairment annually. The methodology for
impairment testing is described in Note 3.3.
All intellectual property rights are owned by Jotun A/S.
Development costs are capitalised only if the product is
technically and commercially feasible and the business case
demonstrates a probability for future economic benefit.
Capitalised development costs mainly include internal payroll
costs in addition to purchased materials and services used in
the development programmes. Amortisation of assets with
limited useful life begins when development is complete, and
the asset is available for use.
(NOK million) Development cost
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IT applications and other
Jotun Group
intangibles Total
Cost
Balance as of 1 January 2020 395 755 1 150
Additions 50 61 111
Disposals - -3 -3
Reclassifications - 8 8
Foreign currency translation effect - -8 -8
Balance as of 31 December 2020 445 813 1 258
Additions 37 67 103
Disposals - -117 -117
Reclassifications - 2 2
Foreign currency translation effect - 4 4
Balance as of 31 December 2021 482 769 1 250
Amortisation and impairment
Balance as of 1 January 2020 -88 -350 -438
Amortisation -19 -59 -79
Disposals - 3 3
Reclassifications - -8 -8
Foreign currency translation effect - 5 5
Balance as of 31 December 2020 -107 -410 -517
Amortisation -20 -62 -83
Disposals - 114 114
Reclassifications - - -
Foreign currency translation effect - - -
Balance as of 31 December 2021 -127 -358 -486
Net book value
Balance as of 31 December 2021 355 410 765
Balance as of 31 December 2020 338 403 741
Estimated useful life 8-10 years 3-8 years
Jotun Annual Report 2021 I 27