Notes to the Statements of Financial Position

Goodwill and Other Intangible Assets

Changes in intangible assets in 2018 were as follows:

Changes in Intangible Assets

 

 

Acquired goodwill

 

Patents and technol-ogies

 

Trade- marks

 

Marketing and distribution rights

 

Production rights

 

R&D projects

 

Other rights and advance payments

 

Total

 

 

€ million

 

€ million

 

€ million

 

€ million

 

€ million

 

€ million

 

€ million

 

€ million

Cost of acquisition or generation, December 31, 2017

 

14,751

 

12,861

 

10,453

 

1,911

 

1,923

 

1,044

 

1,564

 

44,507

Acquisitions

 

24,503

 

17,152

 

3,941

 

845

 

11

 

4,637

 

360

 

51,449

Capital expenditures

 

 

46

 

 

358

 

 

53

 

243

 

700

Retirements

 

 

(26)

 

(7)

 

(55)

 

 

(149)

 

(41)

 

(278)

Transfers

 

 

3

 

 

334

 

 

(280)

 

(57)

 

Transfers (IFRS 5)

 

(318)

 

(273)

 

(40)

 

(17)

 

(76)

 

(109)

 

(22)

 

(855)

Divestments / Changes in scope of consolidation

 

 

 

(4)

 

 

 

 

(2)

 

(6)

Inflation adjustment (IAS 29)

 

20

 

6

 

 

1

 

 

 

6

 

33

Exchange differences

 

737

 

498

 

299

 

50

 

(1)

 

126

 

24

 

1,733

December 31, 2018

 

39,693

 

30,267

 

14,642

 

3,427

 

1,857

 

5,322

 

2,075

 

97,283

Accumulated amortization and impairments, December 31, 2017

 

 

9,638

 

4,041

 

1,283

 

1,836

 

117

 

1,167

 

18,082

Retirements

 

 

(23)

 

(10)

 

(31)

 

 

(149)

 

(27)

 

(240)

Amortization and impairment losses

 

1,547

 

1,300

 

1,477

 

149

 

23

 

65

 

202

 

4,763

Amortization

 

 

1,300

 

429

 

138

 

23

 

 

200

 

2,090

Impairment losses

 

1,547

 

 

1,048

 

11

 

 

65

 

2

 

2,673

Impairment loss reversals

 

 

 

 

 

 

 

 

Transfers

 

 

 

 

 

 

46

 

(46)

 

Transfers (IFRS 5)

 

 

(230)

 

(29)

 

(8)

 

(76)

 

 

(24)

 

(367)

Divestments / Changes in scope of consolidation

 

 

 

3

 

 

 

 

 

3

Inflation adjustment (IAS 29)

 

 

6

 

 

1

 

 

 

5

 

12

Exchange differences

 

 

 

47

 

56

 

24

 

(1)

 

 

12

 

138

December 31, 2018

 

1,547

 

10,738

 

5,538

 

1,418

 

1,782

 

79

 

1,289

 

22,391

Carrying amounts, December 31, 2018

 

38,146

 

19,529

 

9,104

 

2,009

 

75

 

5,243

 

786

 

74,892

Carrying amounts, December 31, 2017

 

14,751

 

3,223

 

6,412

 

628

 

87

 

927

 

397

 

26,425

In the Consumer Health segment, an impairment loss of €1,547 million was recognized on goodwill due especially to a further increase in competition, challenges posed by the transformation of the Consumer Health business as a result of changes in consumer behavior, and a higher cost of capital. Against this backdrop, impairment losses were also recognized on other intangible assets, primarily allergy brands (Claritin™ €584 million, Aerius™ €37 million) and cold medicines (Afrin™ €292 million) acquired in 2014 from Merck & Co. We also recognized impairment losses on skincare brands (Kang Wang™ €78 million and Pi Kang Wang™ €43 million) acquired in 2014 from Dihon Pharmaceutical Group Co. Ltd.

In the Pharmaceuticals segment, impairment losses were recognized in connection with the termination of research and development projects, primarily in the field of ophthalmology (€43 million), oncology (€10 million) and pulmonology / anti-infectives (€8 million).

Details of acquisitions and divestments are provided in Notes “Business combinations and other acquisitions” and “Divestments, material sale transactions and discontinued operations.” The impairment testing procedure for goodwill and other intangible assets is explained in Note “Basic principles, methods and critical accounting estimates.”

Changes in intangible assets in 2017 were as follows:

Changes in Intangible Assets (Previous Year)

 

 

Acquired goodwill

 

Patents and technol-ogies

 

Trade- marks

 

Marketing and distribution rights

 

Production rights

 

R&D projects

 

Other rights and advance payments

 

Total

 

 

€ million

 

€ million

 

€ million

 

€ million

 

€ million

 

€ million

 

€ million

 

€ million

Cost of acquisition or generation, December 31, 2016

 

16,312

 

13,162

 

11,045

 

2,044

 

2,138

 

887

 

2,666

 

48,254

Acquisitions

 

51

 

 

85

 

 

4

 

 

 

140

Capital expenditures

 

 

78

 

 

54

 

 

458

 

167

 

757

Retirements

 

 

(61)

 

(31)

 

(4)

 

 

(220)

 

(365)

 

(681)

Transfers

 

 

 

1

 

45

 

 

17

 

(63)

 

Transfers (IFRS 5)

 

(481)

 

(123)

 

(40)

 

(14)

 

(118)

 

(43)

 

(403)

 

(1,222)

Divestments / Changes in scope of consolidation

 

(254)

 

(31)

 

(5)

 

(105)

 

(96)

 

 

(322)

 

(813)

Inflation adjustment (IAS 29)

 

5

 

 

 

 

 

 

 

5

Exchange differences

 

(882)

 

(164)

 

(602)

 

(109)

 

(5)

 

(55)

 

(116)

 

(1,933)

December 31, 2017

 

14,751

 

12,861

 

10,453

 

1,911

 

1,923

 

1,044

 

1,564

 

44,507

Accumulated amortization and impairments, December 31, 2016

 

 

9,312

 

3,673

 

1,268

 

2,027

 

235

 

1,860

 

18,375

Retirements

 

 

(36)

 

(20)

 

(4)

 

 

(201)

 

(356)

 

(617)

Amortization and impairment losses

 

 

596

 

580

 

170

 

21

 

98

 

228

 

1,693

Amortization

 

 

596

 

369

 

133

 

21

 

 

118

 

1,237

Impairment losses

 

 

 

211

 

37

 

 

98

 

110

 

456

Impairment loss reversals

 

 

 

 

 

 

 

 

Transfers

 

 

 

 

1

 

 

 

(1)

 

Transfers (IFRS 5)

 

 

(86)

 

(39)

 

(9)

 

(118)

 

(2)

 

(199)

 

(453)

Divestments / Changes in scope of consolidation

 

 

(13)

 

(5)

 

(77)

 

(90)

 

 

(295)

 

(480)

Exchange differences

 

 

(135)

 

(148)

 

(66)

 

(4)

 

(13)

 

(70)

 

(436)

December 31, 2017

 

 

9,638

 

4,041

 

1,283

 

1,836

 

117

 

1,167

 

18,082

Carrying amounts, December 31, 2017

 

14,751

 

3,223

 

6,412

 

628

 

87

 

927

 

397

 

26,425

Carrying amounts, December 31, 2016

 

16,312

 

3,850

 

7,372

 

776

 

111

 

652

 

806

 

29,879

Goodwill and other intangible assets with an indefinite useful life that are of material significance for the Bayer Group are allocated to the following cash-generating units or unit groups as of the end of the reporting period:

Intangible Assets with an Indefinite Useful Life

 

 

Cash-generating
unit / unit group

 

Goodwill

 

Material intangible assets with indefinite useful life

Reporting segment

 

 

 

€ million

 

€ million

Pharmaceuticals

 

Pharmaceuticals

 

7,247

 

510

Consumer Health

 

Consumer Care

 

4,274

 

32

Crop Science

 

Crop Science

 

26,528

 

4,788

Animal Health

 

Animal Health

 

97

 

21

In the case of research and development projects, the point in time from which a capitalized asset can be expected to generate an economic benefit for the company cannot be determined. Such assets are therefore classified as having an indefinite useful life. Research and development projects were capitalized at a total amount of €5,243 million as of the end of 2018 (2017: €927 million).

Another intangible asset classified as having an indefinite useful life is the Bayer Cross, which was reacquired for the North America region in 1994, having been awarded to the United States and Canada under the reparations agreements at the end of the First World War. The period for which the Bayer Group will derive an economic benefit from this name cannot be determined as Bayer intends to make continuous use of it. The Bayer Cross is capitalized at €108 million.

Compare to Last Year