FFIINANNANCCIALIAL S STTAATTEEMMEENNTTSS NOTES TO THE FINANCIAL STATEMENTS CONTINUED S 2 ACCOUNTING POLICIES CONTINUED Amortisation TR Intangible assets continued Following initial recognition, the historical cost model is applied, with A Purchased intellectual property intangible assets being carried at cost less accumulated amortisation and TE G I Purchased intellectual property that is not integral to an item of property, accumulated impairment losses. Amortisation of these capitalised costs C plant and equipment is recognised separately as an intangible asset begins when the asset is available for use. Intangible assets with a finite R E stated at cost less accumulated depreciation. life have no residual value and are amortised on a straight-line basis over P O their expected useful lives as follows: R Brands T An acquired brand is only recognised in the Statement of Financial Position as an intangible asset where it is supported by a registered Years Purchased intellectual property 5 G trademark, is established in the marketplace, the brand could be sold O separately from the rest of the business and where the brand achieves Development costs 1 to 10 VE R earnings in excess of those achieved by unbranded products. Technology 10 Software and other 3 to 10 NAN The value of an acquired brand is determined by allocating the purchase Dealer network 20 C price consideration of an acquired business between goodwill and the E underlying fair values of the tangible assets, brands and other intangible assets acquired, using an income approach following the multi-period The useful lives and residual values of capitalised development costs are F excess earnings methodology. Acquired brands have an indefinite life determined at the time of capitalisation and are reviewed annually for I when there is no foreseeable limit to the period over which the asset is appropriateness and recoverability. NAN expected to generate cash inflows. C Amortisation of special vehicle development costs are spread evenly IAL Development costs across the limited quantity of vehicles produced and charged to the S Expenditure on internally developed intangible assets, excluding Income Statement at the point of sale for each vehicle. T A T development costs, is taken to the Income Statement in the year in which E it is incurred. Clearly defined and identifiable development costs are Property, plant and equipment M Property, plant and equipment is stated at cost less accumulated E N capitalised under IAS 38 ‘Intangible Assets’ after the following criteria T have been met: depreciation and accumulated impairment losses. Cost comprises the S aggregate amount paid, and the fair value of any other consideration – The project’s technical feasibility and commercial viability, based on an given, to acquire the asset, including directly attributable costs to make F estimate of future cash flows, can be demonstrated when the project the asset capable of operation. Borrowing costs directly attributable to U R has reached a defined milestone according to the Group's established assets under construction are capitalised. T H product development model. E Depreciation is provided on all property, plant and equipment, other than R – Technical and financial resources are available for the project. land, on a straight-line basis to its residual value over its expected useful INF – An intention to complete the project has been confirmed. – The correlation between development costs and future revenues has life as follows: OR been established. Years M A T Freehold buildings 30 I Technology Plant and machinery 5 to 30 ON Patented and unpatented technology acquired in business combinations is valued using the cost approach. The obsolete element is determined by Fixtures and fittings 3 to 12 reference to the proportion of the product lifecycle that had expired at Tooling 1 to 15 the acquisition date. Technology acquired from third parties is measured Motor vehicles 3 to 5 at the acquisition date fair value using the cost approach. Dealer network Tooling is depreciated over the life of the project. Assets in the course Save for certain direct sales of some special edition and buyer- of construction are included in their respective category but are not commissioned vehicles, the Group sells its vehicles exclusively through depreciated until available for use. The carrying values of property, a network of dealers. All dealers in the dealer network are independent plant and equipment are reviewed for impairment if events or changes in dealers with the exception of Aston Martin Works Limited. To the extent circumstances indicate the carrying value may not be recoverable and are that the Group benefits from the network, the dealer network has been written down immediately to their recoverable amount. Useful lives and valued based on costs incurred by the Group. The existing Dealer residual values are reviewed annually and where adjustments are required Network asset arose as part of a business combination. these are made prospectively. An item of property, plant and equipment is derecognised upon disposal. Any gain or loss arising on the derecognition of the asset is included in the Income Statement in the period of derecognition. ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2023 150