Other Intangible Assets

The changes of other intangible assets by asset classes for the years ended December 31, 2013, and 2012, are as follows.

 

Purchased intangible assets

Internally generated intangible assets

Total other intangible assets

 

Unamortized

Amortized

Amortized

 

in € m.

Retail investment management agreements

Other

Total unamortized purchased intangible assets

Customer-related intangible assets

Value of business acquired

Contract-based intangible assets

Software and other

Total amortized purchased intangible assets

Software

 

1

The € 456 million were included in general and administrative expenses.

2

Of which € 291 million were included in impairment of intangible assets, consisting of impairments of retail management agreements (€ 202 million), customer-related intangible assets (€ 86 million) and trademarks (€ 2 million). Furthermore, € 96 million of impairments related to purchased (€ 1 million) and self-developed software (€ 95 million) were recorded in general and administrative expenses.

3

The € 518 million were included in general and administrative expenses.

4

Of which € 79 million were included in impairment of intangible assets, consisting of impairments of customer-related intangible assets (€ 72 million) and beneficial contracts (€ 7 million). Furthermore, € 47 million of impairments related to purchased (€ 4 million) and self-developed software (€ 43 million) were recorded in general and administrative expenses.

Cost of acquisition/manufacture:

 

 

 

 

 

 

 

 

 

 

Balance as of January 1, 2012

894

446

1,340

1,496

814

698

909

3,917

1,425

6,682

Additions

0

0

0

22

12

0

43

77

705

782

Changes in the group of consolidated companies

0

0

0

0

0

0

0

0

0

0

Disposals

0

0

0

0

0

0

23

23

18

41

Reclassifications from (to) “held for sale”

0

0

0

0

0

0

(1)

(1)

0

(1)

Transfers

0

(4)

(4)

0

0

0

16

16

153

165

Exchange rate changes

(16)

(2)

(18)

1

22

(12)

(6)

5

(4)

(17)

Balance as of December 31, 2012

878

440

1,318

1,519

848

686

938

3,991

2,261

7,570

Additions

0

0

0

24

0

0

41

65

663

728

Changes in the group of consolidated companies

0

0

0

(12)

0

0

11

(1)

0

(1)

Disposals

0

0

0

0

0

0

19

19

36

55

Reclassifications from (to) “held for sale”

0

0

0

(48)

0

0

(41)

(89)

(10)

(99)

Transfers

0

0

0

0

0

0

22

22

(68)

(46)

Exchange rate changes

(38)

1

(37)

(34)

(18)

(25)

(16)

(93)

(34)

(164)

Balance as of December 31, 2013

840

441

1,281

1,449

830

661

936

3,876

2,776

7,933

Accumulated amortization and impairment:

 

 

 

 

 

 

 

 

 

 

Balance as of January 1, 2012

99

2

101

541

130

107

510

1,288

464

1,853

Amortization for the year

0

0

0

114

31

37

100

282

174

4561

Changes in the group of consolidated companies

0

0

0

0

0

0

0

0

0

0

Disposals

0

0

0

0

0

0

20

20

16

36

Reclassifications from (to) “held for sale”

0

0

0

0

0

0

(1)

(1)

0

(1)

Impairment losses

202

2

204

86

0

0

3

89

95

3882

Reversals of impairment losses

0

0

0

0

0

0

0

0

0

0

Transfers

0

0

0

(1)

0

0

11

10

(2)

8

Exchange rate changes

(1)

(2)

(3)

1

3

(2)

(11)

(9)

(8)

(20)

Balance as of December 31, 2012

300

2

302

741

164

142

592

1,639

707

2,648

Amortization for the year

0

0

0

99

32

36

112

279

239

5183

Changes in the group of consolidated companies

0

0

0

(12)

0

0

6

(6)

0

(6)

Disposals

0

0

0

0

0

0

13

13

34

47

Reclassifications from (to) “held for sale”

0

0

0

(39)

0

0

(32)

(71)

(6)

(77)

Impairment losses

0

0

0

72

0

7

4

83

43

1264

Reversals of impairment losses

0

0

0

0

0

0

0

0

0

0

Transfers

0

0

0

0

0

0

10

10

(21)

(11)

Exchange rate changes

(13)

0

(13)

(25)

(2)

(5)

(12)

(44)

(19)

(76)

Balance as of December 31, 2013

287

2

289

836

194

180

667

1,877

909

3,075

Carrying amount:

 

 

 

 

 

 

 

 

 

 

As of December 31, 2012

578

438

1,016

778

684

544

346

2,352

1,554

4,922

As of December 31, 2013

553

439

992

613

636

481

269

1,999

1,867

4,858

Amortizing Intangible Assets

Changes in amortizing other intangible assets recognized during 2013 mainly included additions of € 663 million to internally generated intangible assets, which represent the capitalization of expenses incurred in conjunction with the Group’s activities related to the development of own-used software. Impairments of € 83 million recorded on purchased other intangible assets were largely attributable to the commercial banking activities in the Netherlands (GTB), which had seen similar charges already in 2012. The impairment on self-developed software of € 43 million was largely a result of the reassessment of current platform software under the OpEx Programm.

In 2012, additions to internally-generated intangible assets were € 705 million. Impairments recorded on customer-related intangible assets totaling € 86 million included € 73 million in connection with measures initiated in the fourth quarter 2012 to turnaround the acquired commercial banking activities in the Netherlands (GTB) and € 13 million related to the realignment of PBC’s Consumer Banking proposition. The impairment of self-developed software of € 95 million was mainly the result of changes in the planned deployment of an IT system in DeAWM.

Other intangible assets with finite useful lives are generally amortized over their useful lives based on the straight-line method (except for the VOBA, as explained in Note 41 “Insurance and Investment Contracts”).

Useful lives of other amortized intangible assets by asset class

 

Useful lives in years

Internally generated intangible assets:

 

Software

up to 10

Purchased intangible assets:

 

Customer-related intangible assets

up to 25

Contract-based intangible assets

up to 23

Value of business acquired

up to 30

Other

up to 80

Unamortized Intangible Assets

Within this asset class, the Group recognizes certain contract-based and marketing-related intangible assets, which are deemed to have an indefinite useful life.

In particular, the asset class comprises the below detailed investment management agreements related to retail mutual funds and certain trademarks. Due to the specific nature of these intangible assets, market prices are ordinarily not observable and, therefore, the Group values such assets based on the income approach, using a post-tax DCF-methodology.

Retail investment management agreements: These assets, amounting to € 553 million, relate to the Group’s U.S. retail mutual fund business and are allocated to the DeAWM CGU. Retail investment management agreements are contracts that give DWS Investments the exclusive right to manage a variety of mutual funds for a specified period. Since these contracts are easily renewable, the cost of renewal is minimal, and they have a long history of renewal, these agreements are not expected to have a foreseeable limit on the contract period. Therefore, the rights to manage the associated assets under management are expected to generate cash flows for an indefinite period of time. This intangible asset was recorded at fair value based upon a valuation provided by a third party at the date of the Group’s acquisition of Zurich Scudder Investments, Inc. in 2002.

The recoverable amount of the asset was calculated as fair value less costs to sell using the multi-period excess earnings method. In 2013, there was no impairment. In 2012, a loss of € 202 million was recognized in the income statement as impairment of intangible assets. The impairment loss was predominantly due to declines in the expected development of invested asset flows, considering historical growth trends and impacts from the strategic review of the business conducted in 2012 as well as the competitive environment. In 2011, which also considered the then-announced strategic review of certain parts of the AM business, there was no impairment as the recoverable amount exceeded the carrying amount.

Trademarks: The other unamortized intangible assets include the Postbank (allocated to CGU PBC) and the Sal. Oppenheim (allocated to CGU DeAWM) trademarks, which were acquired in 2010. The Postbank trademark was initially recognized in 2010 at € 382 million. In finalizing the purchase price allocation in 2011, the fair value of the Postbank trademark increased to € 411 million. The Sal. Oppenheim trademark was recognized at € 27 million. Since both trademarks are expected to generate cash flows for an indefinite period of time, they are classified as unamortized intangible assets. Both trademarks were recorded at fair value at the acquisition date, based on third party valuations. The recoverable amounts were calculated as the fair value less costs to sell of the trademarks based on the income approach using the relief-from-royalty method. Since acquisition, there have been no impairments.


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