20. Intangible assets

20.1 Goodwill

The breakdown of the balance under this heading in the accompanying consolidated balance sheets, according to the cash-generating units (CGU), to which the Goodwill are allocated for purposes of impairment testing, is as follows:

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Goodwill. Breakdown by CGU and Changes of the year 2013	Millions of Euros
	Balance at the Beginning	Additions	Exchange	Impairment	Others (*)	Balance at the End
The United States	4,320	-	(187)	-	-	4,133
Mexico	663	-	(33)	-	-	630
Colombia	259	-	(32)	-	-	227
Chile	175	-	(9)	-	(100)	65
Others	13	-	(1)	-	-	12
Total	5,430	-	(262)	-	(100)	5,069

(*) Due to the sale of AFP Provida (See Note 3). Download Excel

Goodwill. Breakdown by CGU and Changes of the year 2012	Millions of Euros
	Balance at the Beginning	Additions	Exchange	Impairment	Others (*)	Balance at the End
The United States	4,409	-	(85)	-	(4)	4320
Mexico	632	-	32	-	(1)	663
Colombia	240	-	19	-	-	259
Chile	188	-	11	-	(24)	175
Others	66	-	-	(54)	-	13
Total	5,535	-	(23)	(54)	(29)	5,430

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Goodwill. Breakdown by CGU and Changes of the year 2011	Millions of Euros
	Balance at the Beginning	Additions	"Exchange	Impairment	Others (*)	Balance at the End
The United States	5,773	-	(85)	(1,444)	1	4409
Mexico	678	11	(57)	-	-	632
Colombia	236	-	4	-	-	240
Chile	202	-	(14)	-	-	18
Others	60	7	-	-	-	67
Total	6,949	18	12	(1,444)	1	5,536

As described in Note 2.2.8, the cash-generating units (CGU) to which goodwill has been allocated are periodically tested for impairment by including the allocated goodwill in their carrying amount. This analysis is performed at least annually and whenever there is any indication of impairment. As of December 31, 2013, no indicators of impairment have been identified in any of the main cash-generating units.

The Group’s most significant goodwill corresponds to the CGU in the United States. The calculation of the impairment loss uses the cash flow projections estimated by the Group’s Management, based on the latest budgets available for the next 5 years. As of December 31, 2013, the Group used a sustainable growth rate of 4.0% (4.0% and 4.0% as of December 31, 2012 and 2011, respectively) to extrapolate the cash flows in perpetuity starting on the fifth year (2018), based on the real GDP growth rate of the United States and the income recurrence. The rate used to discount the cash flows is the cost of capital assigned to the CGU, and stood at 10.8% as of December 31, 2013 (11.2% and 11.4% as of December 31, 2012 and 2011, respectively), which consists of the free risk rate plus a risk premium.

If the discount rate had increased or decreased by 50 basis points, the recoverable amount would have decreased or increased by €691million and €801 million respectively. If the growth rate had increased or decreased by 50 basis points, the recoverable amount would have increased or decreased by €648 million and €560 million respectively.

In previous years, the Group performed the necessary goodwill impairment tests with the following results:

• As of December 31, 2012, no impairment was detected in any of the main cash-generating units, except for the immaterial impairment loss of €49 million in the retail business in Europe and €4 million in wholesale business in. This amount was recognized under the heading "Impairment losses on other assets (net) – Goodwill and other intangible assets” in the consolidated income statement for 2012 (see Note 50).
• As of December 31, 2011, impairment losses of €1,444 million have been estimated in the United States cash-generating unit which have been recognized under the heading "Impairment losses on other assets (net) - Goodwill and other intangible assets" in the accompanying consolidated income statement for 2011 (see Note 50).

Both the CGU’s fair values in the United States and the fair values assigned to its assets and liabilities had been based on the estimates and assumptions that the Group’s Management has deemed most likely given the circumstances. However, some changes to the valuation assumptions used could result in differences in the impairment test result.

In general, goodwill valuations are reviewed by independent experts by applying different valuation methods on the basis of each asset and liability. The valuation methods used are: The method for calculating the discounted value of future cash flows, the market transaction method and the cost method.

Unnim Acquisition

As stated in Note 3, in 2012 the Group acquired 100% of the share capital of the Unnim Bank (“Unnim”).

Shown below are details of the carrying amount of the consolidated assets and liabilities of Unnim prior to its acquisition and the corresponding fair values, gross of tax, which have been estimated in accordance with the IFRS-3 acquisition method to calculate the goodwill recognized as a result of this acquisition.

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Valuation and calculation of badwill for the acquisition of 100% stake in Unnim	Millions of Euros
	Carrying Amount	Fair Value
Acquisition cost (A)
Cash	184	184
Loans and receivables	18,747	18,974
Of which: Asset Protection Schemes (APS)	-	1,744
Financial assets	4,801	4,569
Hedging derivates	571	571
Non-current assets held for sale	707	457
Investments in entities accounted for using the equity method	206	89
Tangible assets	1,090	752
Of which: Real Estate	1,045	708
Intangibles assets obtained from previous business combinations	7	-
Intangible assets identify at the date of the business combination	-	187
Other assets (including inventories)	1,200	658
Financial liabilities	(27,558)	(26,102)
Provisions	(237)	(687)
Other liabilities	(91)	(91)
Deferred tax	932	794
Total fair value of assets and liabilities acquiered (B)	559	355
Non controlling Interest Unnim Group* (C)	(34)	(34)
Badwill (A)-(B)-(C )		(321)

(*) Non-controlling interests that Unnim Group maintained at July 27, 2012 previous to the integration.

Because the resulting goodwill was negative, a gain was recognized in the accompanying consolidated income statement for 2012 under the heading “Negative goodwill” (see Note 2.2.7).

The calculation of this amount is final, once the estimate of all the fair values has been reviewed and, in accordance with IFRS-3, they may be modified during a period of one year from the acquisition date. However, there have been no significant changes in that amount.

The valuations were reviewed by independent experts (other than the Group’s accounts auditor) by applying different valuation methods on the basis of each asset and liability. The valuation methods used are: The method for calculating the discounted value of future cash flows, the market transaction method and the cost method.

20.2 Other intangible assets

The breakdown of the balance and changes of this heading in the accompanying consolidated balance sheets, according to the nature of the related items, is as follows:

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Other Intangible Assets	Millions of Euros
	2013	2012	2011
Computer software acquisition expenses	1,480	1,370	1,077
Other deferred charges	20	34	34
Other intangible assets	199	303	234
Impairment	(9)	(5)	(1)
Total	1,690	1,702	1,344

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Other Intangible Assets. Changes Over the Period	Notes	Millions of Euros
		2013	2012	2011
Balance at the beginning		1,702	1,344	1,058
Additions		543	789	619
Amortization in the year	47	(514)	(413)	(319)
Exchange differences and other		(33)	(18)	(14)
Impairment	50	(9)	-	-
Balance at the end		1,690	1,702	1,344

As of December 31, 2013, the fully amortized intangible assets still in use amounted to €952 million.