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assumptions are based on past experience and reasonable projections approved by Company
management and updated in accordance with the performance of the advertising markets.
Taking the correlation between the advertising market and the evolution of domestic demand and
private consumption as a reference, a retrospective analysis was conducted using the historical
data of these two variables, based on market consensus.
These future projections cover the next five years. The discount rate used to measure this
intangible asset was between 9% and 10%. Zero perpetual growth was used.
The sensitivity analysis shows that a 1.0% increase in the perpetual growth rate gives rise to an
increase in value of EUR 40 million, while a decrease of 1.0% gives rise to a decrease of EUR 32
million. Also, a 1.0% increase in the discount rate gives rise to a decrease of EUR 64 million, and a
1.0% decrease in the discount rate gives rise to an increase of EUR 81 million. The changes in
value used in all the sensitivity analyses would not reduce the recoverable amount below the
carrying amount.
Spanish Audit Law 22/2015, of 20 July, introduced certain changes to the Spanish Commercial
Code (Article 39.4) which affect intangible assets and goodwill. The new wording establishes that
intangible assets are assets with a finite useful life and when the useful life of these assets cannot
be estimated reliably, they shall be amortised over a period of ten years, unless another legal
provision or regulation establishes a different time period. Unless there is evidence to the contrary,
it is established that goodwill shall be assumed to have a useful life of ten years. These changes
shall be applicable for financial statements relating to the years beginning on or after 1 January
2016.
In addition, in December 2015, the Spanish Accounting and Audit Institute (ICAC) published the
draft Royal Decree amending the Spanish National Chart of Accounts which implements the
aforementioned amendments with an accounting impact made to the Commercial Code, although
at the date of formal preparation of these financial statements, the Royal Decree in question had
not been approved.
The Company is currently analysing the future impacts of these amendments although, since the
Royal Decree has not yet been approved and it will include the rules on transition, it is not possible
to provide a reliable estimate of its effects.
Computer software
The Company recognises under “Computer Software” the costs incurred in the acquisition and
development of computer programs, including website development costs. Computer software
maintenance costs are recognised with a charge to the statement of profit or loss for the year in
which they are incurred. Computer software is amortised on a straight-line basis over three to five
years.
4.2 Property, plant and equipment
Property, plant and equipment are initially recognised at acquisition or production cost and are
subsequently reduced by the related accumulated depreciation and by any impairment losses
recognised, as indicated in this note.
Property, plant and equipment upkeep and maintenance expenses are recognised in the statement
of profit or loss for the year in which they are incurred. However, the costs of improvements
leading to increased capacity or efficiency or to a lengthening of the useful lives of the assets are
capitalised.
The Company depreciates its property, plant and equipment by the straight-line method at annual
rates based on the years of estimated useful life of the assets, the detail being as follows: