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FINANCIAL STATEMENTS, MANAGEMENT AND CORPORATE GOVERNANCE REPORT.
2011
Concessions, patents and trademarks
These relate mainly to trademarks and concessions for television channels.
The “Cuatro” trademark and the“Cuatro”multiplex operators’ license were identified in the Sogecuatro Group purchase
price allocation price (Note 6).The “Cuatro” trademark has an estimated useful life of 20 years.
The license is considered to be an intangible asset with an indefinite useful life. Intangible assets with indefinite useful
lives are not amortised, but are assessed for impairment at least annually or when there are indications of impairment.
Audiovisual property rights
The following intangible assets are recognised under this heading:
Property rights on external audiovisual production
These rights are initially recognised at their acquisition price. If they are acquired in closed packages and the breakdown
of the individual value of each product is not provided, individual values are calculated based on a weighting factor
equivalent to the acquisition cost of products of a similar type and category as if the acquisition were made on an
individual basis. If the contract stipulates the individual value of each product/title, this is taken directly as the asset value.
The right is recognised at the time the material becomes available for broadcasting pursuant to the contract, and is
recognised under Customer Advances until it becomes available for broadcasting. In the case of several rights associated
with a single contract that become available during the same year but on different dates, the Company recognises the
inclusion of the rights under the contract on the date on which the first right is available for broadcasting.
These rights are amortised based on the number of screenings, as follows:
1.
Films and TV movies (non-series)
• Contractual rights for two screenings:
•
First screening: 50% of acquisition cost
•
Second screening: 50% of acquisition cost
• Contractual rights for three or more screenings:
•
First screening: 50% of acquisition cost
•
Second screening: 30% of acquisition cost
•
Third screening: 20% of acquisition cost
2.
Other products (series)
• Contractual rights for two or more screenings:
•
First screening: 50% of acquisition cost
•
Second screening: 50% of acquisition cost
When a screening is sold to a third par ty, the value of the screening, calculated on the basis of the above percentages,
is amor tised on the basis of the buyer’s territorial capacity to distribute the television signal. A cost of goods sold is
recognised based on the revenues generated in the territory where the screening has been sold and adjustments are
made to the unsold value of the screening.
When audience figures for first screenings or channel programming indicate that the net carrying amount is not in line
with the estimated real value, specific impairment provisions are recognised for each product or right.