[43] Intangible assets Audited

The changes in scope of consolidation included additions amounting to € 14.1 million (2011: € 170.6 million). These additions related to the acquisitions of CellASIC Corp. and Biochrom AG. Details of these transactions are presented under Note [4].

The net carrying amount of “Patents, licenses and similar rights, brands, trademarks and other” with finite useful lives amounting to € 5,957.8 million (2011: € 6,812.1 million) mainly included the identified and capitalized assets from the Millipore and Serono purchase price allocations. The vast majority was attributable to technologies and know-how. The remaining useful lives of these assets ranged between 6.0 and 15.0 years. This item also included licenses from these acquisitions with remaining useful lives of between 0.5 and 5.0 years. In response to the increasing market impact of oral therapies for multiple sclerosis, the amortization period of Rebif® was shortened by two years in 2011, starting on April 1. In fiscal 2012, this change increased amortization by a total of € 68.4 million (2011: € 51.3 million).

In fiscal 2012, impairment losses on intangible assets with finite useful lives totaled € 8.5 million (2011: € 59.0 million). Of this amount, € 3.1 million was attributable to the Futuran® and Ketesse® licenses in the Merck Serono division and € 4.0 million to the Fitoladius brand of the Consumer Health division. These impairments were recorded in the income statement as one-time items under “other operating expenses”. Moreover, € 1.4 million was attributable to the Pinion license agreement in the Performance Materials division and was recorded in the income statement as an impairment loss under “other operating expenses”.

The changes in goodwill caused by foreign exchange rates resulted almost exclusively from translating the goodwill for Millipore, part of which is carried in U.S. dollars, into the reporting currency. Since goodwill and intangible assets with indefinite useful lives are not amortized, these are subjected to an annual impairment test. As in 2011, goodwill was not impaired in 2012. Impairment losses on intangible assets with indefinite useful lives totaled € 12.3 million in 2012 (2011: € 111.4 million). Of this amount, € 12.0 million was accounted for by the Merck Serono division, with € 7.4 million attributable to the Ambrx ARX 424 project, € 1.3 million to the Bionomics Kv 1.3 blocker license agreement, € 1.6 million to the license agreement with Domain Therapeutics SA, and € 1.7 million to the Affectis project P2X7 inhibitor. These amounts were recorded in the income statement as one-time items under “other operating expenses.” Moreover, impairment losses of € 0.3 million were incurred in the Performance Materials division in connection with OLED patents. These were recorded in the income statement as impairment losses under “other operating expenses.” In 2011, impairment losses of € 111.4 million on intangible assets with indefinite useful lives were incurred and recorded in the income statement under “amortization of intangible assets.”

The book values of “Patents, licenses and similar rights, brands, trademarks and other” as well as goodwill were attributable to the divisions as follows:

Intangible assets with an indefinite useful life primarily related to rights that Merck had acquired for products or technologies that were still in the research and development stage. Amortization will only begin once product marketing begins.

In fiscal 2012, software amortization expenses of € 8.7 million (2011: € 0.7 million) were recognized and recorded as one-time items under “other operating expenses”. Of this amount, € 8.2 million was attributable to customer relationship management software in the Merck Serono division as well as € 0.4 million to strategic planning software in Corporate and Other.