Goodwill, maintenance portfolios acquired from third parties, software, as well as rights, patents, and licenses are recog­nized as intangible assets.

Intangible assets with finite useful lives are amortized on a straight-line basis over their useful life. The estimated useful life of intangible assets is as follows: for maintenance port­folios: 10 to 15 years; and for other intangible assets, predominantly software: 3 to 5 years.

Goodwill is not amortized but is tested for impairment annually or whenever there are indications that an impairment may have occurred.

For all other intangible assets, an impairment test is performed whenever impairment indicators are identified. If the test reveals that the carrying amount exceeds the recover­able amount, the carrying amount is reduced accordingly. Impairment losses are recognized in the income statement.

Research costs are recognized in the income statement as incurred. Development costs for new products are generally not capitalized, as future economic benefits can typically only be demonstrated once the products have been successfully introduced to the market.

The value in use of the cash-generating units to which goodwill has been allocated is determined annually in the fourth quarter using the discounted cash flow method, or more frequently if any indication of impairment exists.

Future cash flows, pre-tax discount rates, and other parameters relating to the respective cash-generating units are determined using various assumptions. The forecasts for the reporting year, together with the mid-term forecasts for the subsequent three years, serve as the basis. Assumptions such as market condi­tions, order intake, revenue, earnings before taxes, and tax rates are considered reasonable by management.

An impairment loss is recognized in the income statement if the carrying amount of the cash-­generating unit exceeds the value in use. Impairment losses from earlier years cannot be reversed.