Justificación de estado de la contextualización

Intangible assets include the following identifiable non-monetary assets without physical substance: - goodwill,

 development costs,

 rights to the emission of greenhouse gases,  software,

 acquired concessions, patents, licenses,  other intangible assets, and

 intangible assets not yet available for use (under construction), including expenditure on exploring for and evaluating mineral resources (point 2.2.3).

Goodwill

Goodwill represents the excess of the aggregate of the consideration transferred, the amount of any non- controlling interest in the acquiree, and the acquisition-date fair value of the acquirer's previously held equity interest in the acquiree, over the net of the acquisition-date amounts of the identifiable assets and liabilities. Goodwill on acquisition of a subsidiary is included in intangible assets. Goodwill on acquisition of investments in entities accounted for using the equity method is included in the carrying amount of such investment. Goodwill recognised in intangible assets is tested annually for impairment and is recognised in the statement of financial position in the amount initially recognised less any accumulated impairment losses.

Testing for impairment is performed and any potential impairment loss is recognised in accordance with the policies described in point 2.2.4.

The carrying amount of goodwill relating to the subsidiary which was disposed is recognised in profit or loss on disposal of subsidiaries.

Development costs

The entities of the Group carry out development projects which are primarily aimed at reducing copper production costs, increasing the production capacity of smelters and mines, improving the technical parameters of manufactured products, and improving copper production technology.

An intangible asset arising from development is recognised if the entity can demonstrate:

a) the technical feasibility of completing the intangible asset so that it will be available for use or sale, b) the intention to complete the intangible asset and use or sell it,

c) its ability to use or sell the intangible asset,

d) the manner in which the intangible asset will generate probable future economic benefits,

e) the availability of adequate technical, financial and other resources to complete the development and use or sell the intangible asset, and

f) its ability to measure reliably the expenditures attributable to the intangible asset that have been incurred during its development.

Internally generated costs of development projects recognised as an item of intangible assets is the sum of expenditure incurred from the date when the intangible asset arising from development first meets the criteria for recognition.

Capitalised development costs are recognised as an intangible asset not yet available for use and are not amortised until the moment when the given intangible asset is completed and the decision has been taken to implement it. Such intangible assets are, however, tested annually for impairment. The amount of the impairment is recognised in profit or loss.

Internally generated intangible assets are amortised using the straight-line method over the period of their anticipated use.

Research expenditure is recognised as an expense as incurred. Greenhouse gas emission allowances

The companies of the Group participate in a program to limit emissions of carbon dioxide based on the Kyoto protocols of 11 December 1997, which commit government bodies, including those in Poland, to control and reduce emissions of greenhouse gases.

Emissions allowances to be used by an entity for its own needs are recognised as intangible assets. At inception:

 government-granted emissions allowances and any related non-cash government subsidies (recognised as deferred income) are measured at the fair value reflecting the market value of these allowances at inception. Emissions allowances are initially recognised at the date they are granted.

 purchased emissions allowances are measured at cost.

At the end of the reporting period these allowances are measured at cost less any impairment allowances. Emissions allowances are not subject to amortisation.

Emissions allowances recognised under intangible assets are settled and removed from the accounts each time they are redeemed* by the President of the Energy Regulatory Office and used by the Group.

*redemption means the decision to redeem emissions allowances issued by the President of the Energy Regulatory Office based on information provided by the owner of an installation on emissions.

Other intangible assets

The following are recognised by the Group under other intangible assets: rights to water; acquired concessions, patents and licenses; the fee for managing Sierra Gorda S.C.M.; intangible assets due to signed contracts for the sale of services; computer software and other intangible assets.

Other intangible assets are measured at cost at initial recognition.

Any borrowing costs incurred for the purchase or construction of a qualifying item of intangible assets are recognised in the cost. Principles for the capitalisation of borrowing costs are presented in point 2.2.26.

If payment for an intangible asset is deferred for a period which is longer than standard for ordinary buyer’s credit (in practice a period of over 1 year is assumed), its purchase price should reflect the amount which would be paid in cash.

The difference between this amount and the total payment is recognised in profit or loss as interest cost (a discount of liabilities) in financial costs in the period of repayment (settlement) of liabilities. Exchange differences which arise from liabilities in a foreign currency which are related to the acquisition or construction of an item of intangible assets are recognised in profit or loss in the period in which they are incurred.

At the end of the reporting period intangible assets are measured at cost less any accumulated amortisation and accumulated impairment losses. The principles of impairment losses recognition are presented in detail in point 2.2.4.

Intangible assets (excluding goodwill, greenhouse gas emission allowances, water rights, exploration and evaluation assets and intangible assets not yet available for use) are amortised using the straight-line method over their anticipated useful lives, which are as follows for the specific types of intangible assets:

- Development costs – 5 – 15 years, - Software – 2 – 8 years,

- Concessions, licenses and patents – 2 - 5 years,

- Other intangible assets, including rights to geological information – 50 years.

The amortisation method and the amortisation rate are subject to review at the end of each reporting period. As in the case of goodwill, intangible assets not yet available for use (under construction) are not amortised, but are tested annually for impairment. Any potential impairment loss is recognised in profit or loss in accordance with the principles described in point 2.2.4