14. Goodwill
The detail of “Goodwill” in the consolidated balance sheet and of the changes therein in 2012 and 2011 is as follows:
|
|
2012 | 2011 |
|---|---|---|
| Opening balance | 218,094 | 131,685 |
| Acquisitions | - | 86,409 |
| Disposals | (2,933) | - |
| Foreign exchange translation differences | (8,072) | - |
| Closing balance | 207,089 | 218,094 |
| Investee | 2012 | 2011 |
|---|---|---|
| Stradivarius España, S.A. | 53,253 | 53,253 |
| BCN Diseños, S.A. de C.V. | 13,301 | 15,523 |
| Zara Polska, S.p. Zo.o. | 34,744 | 35,940 |
| Zao Zara CIS | 16,579 | 19,822 |
| Pull&Bear CIS | 428 | 428 |
| Stradivarius CIS | 6,336 | 6,719 |
| Zara Serbia, D.O.O. Belgrade | 4,643 | 5,198 |
| Pull & Bear Serbia, D.O.O. Belgrade | 772 | 865 |
| Massimo Dutti Serbia, D.O.O. Belgrade | 929 | 1,040 |
| Bershka Serbia, D.O.O. Belgrade | 898 | 1,006 |
| Stradivarius Serbia, D.O.O. Belgrade | 810 | 907 |
| Oysho Serbia, D.O.O. Belgrade | 540 | 605 |
| Inditex Montenegro, D.O.O. Podgorica | 2,577 | 2,577 |
| UTC Benelux, N.V. | 0 | 2,933 |
| Massimo Dutti Benelux, N.V. | 19,921 | 19,921 |
| Italco Moda Italiana, LDA. | 51,357 | 51,357 |
| Closing balance | 207,089 | 218,094 |
The goodwill corresponding to Stradivarius España, S.A. was generated upon acquisition of this company in 1998 and is stated at its carrying amount at 1 February 2004, the date of transition to EU-IFRSs.
The goodwill corresponding to BCN Diseños, S.A. de C.V. was generated upon acquisition of the holder of the franchise rights to the Massimo Dutti format in Mexico in 2004.
In 2005 Inditex acquired the Polish company formerly called Young Fashion Sp. Zo.o. (now Zara Polska S.p. Zo.o), which until then held the franchise rights to Zara in that country.
In 2006 Inditex acquired 100% of the share capital of the Russian company formerly known as Zao Stockmann-Kranoselskaya (currently Zao Zara CIS), which until then held the franchise rights to Zara in that country.
In 2007 Inditex acquired the companies which held the franchise rights to the Pull & Bear and Stradivarius formats in Russia, thus generating goodwill of euros 428 thousand and euros 6,719 thousand, respectively.
In 2011 the Group acquired the companies that until then had held the franchise rights to the Zara, Pull&Bear, Massimo Dutti, Bershka, Stradivarius and Oysho formats in Serbia and Montenegro, the Massimo Dutti format in Portugal and Belgium and the Uterqüe format in Belgium, giving rise to the goodwill shown in the accompanying table.
Goodwill arising from the acquisition or termination of franchise contracts is equal to the value of intangible assets that did not meet with the requirements established in IFRS 3 for separate recognition. These requirements were essentially related to the capacity of the assets to generate future cash flows.
The recovery of the goodwill is adequately guaranteed through the profitability of the acquired companies, whose future cash flows support their carrying amount at year end (note 31.2-g). This recoverable amount is calculated based on the 2013 budget and the business plan for the following years, which is prepared taking into account expected performance for comparable stores and the expansion plan associated with the units under analysis.
Also, sensitivity analyses were performed in relation to reasonably possible changes in the main fair value estimates and the recoverable amount is higher than the related carrying amount.
