[21] Intangible assets Audited

The change in currency translation differences relative to 2008 is due mainly to the translation of intangible assets reported in Swiss francs into euros – the Group reporting currency.

The net carrying amount of patents, licenses, similar rights with finite useful lives amounting to € 5,179.5 million mainly include the recognized assets from the Serono purchase price allocation in 2007. The vast majority is attributable to technologies and know-how. The remaining useful lives range between 9 and 12 years. This item also includes licenses with remaining useful lives of between 3 and 8 years.

In fiscal 2009, impairment losses on intangible assets with finite useful lives totaled € 78.9 million. Of this total, € 71.5 million was attributable to the licensing rights to Enbrel® (Amgen) and Puregon® (Merck & Co.) capitalized as part of the Serono purchase price allocation, which were written down to the lower value in use due to new estimates on the amount and timing of royalty income. These issues are disclosed in a separate line item in the income statement under amortization of intangible assets.

Owing to amended market estimates and the subsequently sharply lower sales expectations, we recorded a write-off of € 6.9 million on patents and brands from the Liquid Crystals division. The remaining impairments totaling € 0.5 million were attributable to the Performance & Life Science Chemicals division. These impairment losses are recorded under other operating expenses.

The changes in goodwill caused by currency effects result almost exclusively from translating the goodwill for Serono from Swiss francs into euros, the reporting currency of the Merck Group.

Since goodwill and intangible assets with indefinite useful lives are not amortized, these are subjected to an annual impairment test. Here, book values were compared with values in use. Consequently, impairment losses of € 21.1 million result in fiscal 2009. These were primarily due to the write-off of the capitalized assets related to the termination of various research projects from the Merck Serono division and are recorded under other operating expenses.

The book values of patents, licenses and similar rights, brands, trademarks and other as well as goodwill can be attributed to the divisions as follows:

Intangible assets with an indefinite useful life primarily relate to rights that Merck has acquired for products or technologies that are still in the research and development stage. Amortization will only begin once the products start to be marketed.