UBI Banca Group

An intangible asset is recognised if, and only if:
(a) it is probable that the expected future economic benefits attributable to the asset will flow
to the entity;
(b) the cost of the asset can be measured reliably.
The probability of future economic benefits occurring is assessed on the basis of reasonable
and supportable assumptions that represent the best estimate of the economic conditions that
will exist over the useful life of the asset.
The degree of probability attaching to the flow of economic benefits attributable to the use of
the asset is assessed on the basis of the sources of information available at the time of initial
recognition, giving greater weight to external sources of information.
In addition to goodwill and software used over several years, brands, core deposits, assets
under management and assets under management recognised following the merger of the
former BPU Banca and the former Banca Lombarda e Piemontese are also considered as
intangible assets.
8.1.1 Intangible assets with a finite useful life
A finite useful life is defined for an asset where it is possible to estimate a limit to the period
over which the related economic benefits are expected to be produced.
Intangible assets considered as having a finite useful life include software, core deposits,
assets under management and brands.
8.1.2 Intangible assets with an indefinite useful life
An indefinite useful life is defined for an asset where it is not possible to estimate a predictable
limit to the period over which the asset is expected to generate economic benefits for the Bank.
The attribution of an indefinite useful life to an asset does not arise from having already
programmed future expenses which restore the standard level of performance of the asset over
time and prolong its useful life.
Intangible assets considered as having an indefinite useful life include goodwill.
8.2 Recognition criteria
Assets recognised under the balance sheet item 130 “Intangible assets” are stated at cost and
any expenses subsequent to the initial recognition are only capitalised if they are able to
generate future economic benefits and only if those expenses can be reliably determined and
attributed to the assets.
The cost of an intangible asset includes:
• the purchase price including any non-recoverable taxes and duties on purchases after
commercial discounts and bonuses have been deducted;
• any direct costs incurred in bringing the asset into use.
8.3 Measurement criteria
Subsequent to initial recognition, intangible assets with a finite useful life are recognised at
cost net of total amortisation and impairment losses that may have occurred. Amortisation is
calculated on a systematic basis over the estimated useful life of the asset (see definition
included in the section “Property, equipment and investment property ”) using the straight line
method for all intangible assets with the exception of intangible assets relating to customer
accounts recognised following the purchase price allocation resulting from the merger of the
former BPU Banca and the former Banca Lombarda e Piemontese. In this case the
amortisation is calculated using percentage rates of amortisation which represent the
probability of the customer accounts ending over time.
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