ANNUAL REPORT 2008 - Gorenje Group

111
Impairment loss on available-for-sale investments recorded under finance expense amounts to
TEUR 5,012.
Note 20 – Income tax expense
5,292 TEUR
Income tax expense is recorded by taking into account current tax liabilities, deferred tax assets,
and deferred tax liabilities.
in TEUR 2008 2007
Current tax expense 5,752 5,290
Deferred tax expense -460 446
Total 5,292 5,736
Effective income tax rate
in TEUR 2008 2007
Profit excluding income tax 15,473 29,400
Income tax using the domestic tax rate 22.0 % 3,404 23.0 % 6,762
Effect of tax rates in foreign jurisdictions 3.1 % 472 2.4 % 715
Non-deductible expenses 40.2 % 6,219 8.0 % 2,340
Tax exempt income -3.6 % -555 -5.2 % -1,517
Tax incentives -27.5 % -4,248 -8.5 % -2,492
Other differences -0.2 % -72
Income tax expense 34.2 % 5,292 19.5 % 5,736
Note 21 – Intangible assets
162,986 TEUR
in TEUR 2008 2007
Long-term deferred development costs 14,054 12,278
Long-term concessions, patents, licenses, trademarks
and similar rights
17,340 7,778
Trademark Atag 61,964
Goodwill 69,358 4,597
Intangible assets under construction 270 441
Total 162,986 25,094
An increase in the value of intangible assets includes, in a significant portion thereof, deferred costs
of development of the new generation of appliances in Gorenje, d.d., and costs of development in
Atag Europe BV.
An increase in the value of intangible assets resulting from the acquisition or purchase of shares
refers to goodwill in the in the amount of TEUR 62,130 and fair value of the trademark Atag in the
amount of TEUR 61,964 established upon the acquisition of Atag Europe BV, goodwill established
upon the purchase of the majority share in PUBLICUS, d.o.o., in the amount of TEUR 1,617, goodwill
established upon the purchase of a proportionate share in IG AP, d.o.o., in the amount of TEUR 705,
and inclusion of intangible assets of the acquired companies in the amount of TEUR 10,756.
Goodwill in the amount of TEUR 2,875 was recorded in 2005 upon the acquisition of Mora Moravia,
s r. o. in the Czech Republic and Gorenje Invest, d.o.o., in Serbia. Goodwill in the amount of TEUR
2,030, which arises from the purchase of the majority share in Surovina, d.d., was adjusted by the
amount of TEUR 308 due to the adjustment of the temporary initial accounting of business combination
in line with the fair value determination.
Impairment testing of goodwill and trademarks
Impairment testing of goodwill and trademarks ATAG, ETNA and PELGRIM arising from the acquisition
of Atag Europe BV was carried out. The calculations are based on cash flow projections for
Atag, which have been prepared on the basis of the accepted business plans for the following year