| 2012 | 2011 | |
|---|---|---|
| Balance as at 1 January | 840,000 | 300 |
| Acquisition of subsidiary – accounting for Ipla brand (see note 38) | 7,800 | - |
| Acquisition of subsidiary – accounting for Polsat brand | - | 840,000 |
| Amortization and impairment | - | (300) |
| Balance as at 31 December | 847,800 | 840,000 |
| 2012 | 2011 | |
|---|---|---|
| Polsat | 840,000 | 840,000 |
| ipla | 7,800 | - |
| Balance as at 31 December | 847,800 | 840,000 |
The value of the Polsat brand is recognized following the acquisition of Telewizja Polsat S.A. (currently Telewizja Polsat Sp. z o.o.) The carrying amount of the brand was allocated to ‘Broadcasting and television production‘ cash-generating unit (see note 20).
The Polsat brand is not amortized as it is considered to have an indefinite useful life. Impairment test performed on Polsat brand balance as at 31 December 2012 did not indicate impairment (see note 20 for impairment test assumptions).
The value of the Ipla brand is recognized following the acquisition of entities comprising IPLA platform (including Redefine Sp. z o.o.) (see note 38). The carrying amount of the brand was allocated to ‘Retail‘ cash-generating unit (see note 20).
The fair value of the brand was estimated on the basis of relief from royalty method. The method is based on the assumption that the benefits of owning a brand are equivalent to the hypothetical costs the owner of the brand would have to incur, should the brand be licensed from another entity based on market rates.
The IPLA brand was valued based on the revenues from advertising and subscription fees.
The royalty fee rate used in the valuation of the Ipla brand was estimated based on the license agreements concluded by the companies with comparable business profile. The analysis included agreements were the licensee’s revenue is mainly generated from internet and/or television services.
The discount rate which reflects the time value of money and the risks associated with anticipated future cash flows was established at 11.7%.
The Ipla brand is not amortized as it is considered to have an indefinite useful life.
