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INTANGIBLE ASSETS AND GOODWILL, NET | 12 Months Ended
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Dec. 31, 2017
Disclosure of detailed information about intangible assets [abstract] |
Disclosure of intangible assets [text block] |
| 11 | INTANGIBLE ASSETS AND GOODWILL, NET
| a) | Intangible assets -
The movement of intangible assets with limited useful life for the years ended December 31, 2017, 2016 and 2015 is as follows:
Description |  | Client relationships (i) |  | Rights of use |  | Brand name (ii) |  | Fund manager contract (iii) |  | Core deposits intangible |  | Software and developments |  | Intangible in progress |  | Other |  | 2017 |  | 2016 |  | 2015 |
|  | S/(000) |  | S/(000) |  | S/(000) |  | S/(000) |  | S/(000) |  | S/(000) |  | S/(000) |  | S/(000) |  | S/(000) |  | S/(000) |  | S/(000) |
Cost - |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balances at January 1 |  |  | 406,186 |  |  | 55,900 |  |  | 261,715 |  |  | 100,608 |  |  | 21,100 |  |  | 1,614,338 |  |  | 302,747 |  |  | 26,841 |  |  | 2,789,435 |  |  | 2,512,114 |  |  | 2,329,549 |
Additions |  |  | – |  |  | – |  |  | – |  |  | – |  |  | – |  |  | 88,466 |  |  | 182,984 |  |  | 272 |  |  | 271,722 |  |  | 277,346 |  |  | 276,564 |
Transfers |  |  | – |  |  | – |  |  | – |  |  | – |  |  | – |  |  | 180,129 |  |  | (180,129) |  |  | – |  |  | – |  |  | – |  |  | (3,299) |
Disposals and others |  |  | 1,019 |  |  | – |  |  | 384 |  |  | 877 |  |  | – |  |  | 26,319 |  |  | 609 |  |  | – |  |  | 29,208 |  |  | (25) |  |  | (90,700) |
Balances at December 31 |  |  | 407,205 |  |  | 55,900 |  |  | 262,099 |  |  | 101,485 |  |  | 21,100 |  |  | 1,909,252 |  |  | 306,211 |  |  | 27,113 |  |  | 3,090,365 |  |  | 2,789,435 |  |  | 2,512,114 |
Accumulated amortization - |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at January 1 |  |  | 190,354 |  |  | 55,900 |  |  | 86,391 |  |  | 5,843 |  |  | 9,681 |  |  | 1,089,884 |  |  | – |  |  | 26,841 |  |  | 1,464,894 |  |  | 1,242,843 |  |  | 1,043,886 |
Amortization of the year |  |  | 30,310 |  |  | – |  |  | 14,792 |  |  | 2,049 |  |  | 3,516 |  |  | 190,413 |  |  | – |  |  | – |  |  | 241,080 |  |  | 224,216 |  |  | 218,874 |
Disposals and others |  |  | 10,888 |  |  | – |  |  | 10,470 |  |  | (5,153) |  |  | (10) |  |  | 25,306 |  |  | – |  |  | – |  |  | 41,501 |  |  | (2,165) |  |  | (19,917) |
Balance at December 31 |  |  | 231,552 |  |  | 55,900 |  |  | 111,653 |  |  | 2,739 |  |  | 13,187 |  |  | 1,305,603 |  |  | – |  |  | 26,841 |  |  | 1,747,475 |  |  | 1,464,894 |  |  | 1,242,843 |
Net carrying amount |  |  | 175,653 |  |  | – |  |  | 150,446 |  |  | 98,746 |  |  | 7,913 |  |  | 603,649 |  |  | 306,211 |  |  | 272 |  |  | 1,342,890 |  |  | 1,324,541 |  |  | 1,269,271 |
During the year 2017 additions are mainly related to the implementation and development of various IT projects such as Nuevo HomeBanking Alta, opening of savings accounts in Kiosco, Yape, User IT, Retail Credits, Effectiveness in approval and Portal Via BCP (implementation of a technological platform, which is used for the administration of the insurance segment of the group, and to develop applications related to customer service channels, and implementation of treasury solutions during the year 2016).
| (i) | Client relationships -
This item consists of the following:
|  | 2017 |  | 2016 |
|  | S/(000) |  | S/(000) |
Prima AFP - AFP Unión Vida |  |  | 107,018 |  |  | 119,367 |
Mibanco |  |  | 39,093 |  |  | 51,121 |
Inversiones IMT |  |  | 26,206 |  |  | 26,438 |
Mibanco - Edyficar Perú |  |  | 3,336 |  |  | 5,155 |
Credicorp Capital Colombia - Correval |  |  | – |  |  | 13,751 |
Net carrying amount |  |  | 175,653 |  |  | 215,832 |
| (ii) | Brand name -
This item consists of the following:
|  | 2017 |  | 2016 |
|  | S/(000) |  | S/(000) |
Mibanco |  |  | 145,095 |  |  | 151,923 |
Inversiones IMT |  |  | 5,351 |  |  | 9,941 |
Credicorp Capital Colombia - Correval |  |  | – |  |  | 13,460 |
Net carrying amount |  |  | 150,446 |  |  | 175,324 |
| (iii) | Fund manager contract -
This item consists of the following:
|  | 2017 |  | 2016 |
|  | S/(000) |  | S/(000) |
Credicorp Capital Colombia - Correval |  |  | 52,635 |  |  | 49,287 |
Inversiones IMT |  |  | 46,111 |  |  | 45,478 |
Net carrying amount |  |  | 98,746 |  |  | 94,765 |
Management has assessed at each reporting date that there was no indication that client relationships, rights of use, brand name, fund management contract and software and developments may be impaired.
b) | Goodwill -
Goodwill acquired through business combinations has been allocated to each subsidiary or groups of them, which are also identified as a CGU for the purposes of impairment testing, as follows:
|  | 2017 |  | 2016 |
|  | S/(000) |  | S/(000) |
Mibanco - Edyficar Perú |  |  | 273,694 |  |  | 273,694 |
Prima AFP – AFP Unión Vida |  |  | 124,641 |  |  | 124,641 |
Credicorp Capital Colombia |  |  | 77,746 |  |  | 80,022 |
Banco de Crédito del Perú |  |  | 52,359 |  |  | 52,359 |
Inversiones IMT |  |  | 41,290 |  |  | 39,284 |
Pacífico Seguros |  |  | 36,354 |  |  | 36,354 |
Atlantic Security Holding Corporation |  |  | 29,795 |  |  | 29,795 |
Crediseguro Seguros Personales |  |  | 96 |  |  | - |
Net carrying amount |  |  | 635,975 |  |  | 636,149 |
The recoverable amount of all of the CGUs has been determined based on the calculations of the fair value less selling costs, which is the present value of the discounted cash flows determined principally with assumptions of projection of revenue and expenses (based on efficiency ratios). Balances of goodwill from Inversiones IMT and Credicorp Capital Colombia are impacted by the volatility of the exchange rate of the local currency of the countries in which they operate against the exchange rate of Grupo Credicorp’s functional currency. The following table summarizes the key assumptions used for the calculation of fair value less selling costs in 2017 and 2016:
|  | At December 31, 2017 |
Description |  | Terminal value growth rate |  | Discount rate |
|  | % |  | % |
Mibanco - Edyficar Perú |  |  | 3.00 |  | 12.43 |
Prima AFP – AFP Unión Vida |  |  | 1.00 |  | 9.41 |
Credicorp Capital Colombia |  |  | 3.80 |  | 12.63 |
Banco de Crédito del Perú |  |  | 5.00 |  | 11.46 |
Inversiones IMT |  |  | 5.25 |  | 11.72 |
Pacífico Seguros (*) |  |  | 5.00 |  | 11.24 and 12.38 |
Atlantic Security Holding Corporation |  |  | 2.00 |  | 10.31 |
| (*) | As of December 31, 2017, corresponds to the discount rates used by the Group to determine the recoverable value for the non-life and life insurance business lines cash flows that comprised this CGU as a result of the merger, See Note 2(a).
|  | At December 31, 2016 |
Description |  | Terminal value growth rate |  | Discount rate |
|  | % |  | % |
Mibanco - Edyficar Perú |  |  | 3.00 |  |  | 12.48 |
Prima AFP - AFP Unión Vida |  |  | 1.20 |  |  | 8.73 |
Credicorp Capital Colombia |  |  | 3.80 |  |  | 13.44 |
Banco de Crédito del Perú |  |  | 5.00 |  |  | 12.48 |
Inversiones IMT |  |  | 5.25 |  |  | 12.41 |
Pacífico Seguros |  |  | 5.00 |  |  | 11.66 |
Atlantic Security Holding Corporation |  |  | 2.00 |  |  | 11.17 |
Five or ten years of cash flows, depending on the business maturity, were included in the discounted cash flow model. The growth rate estimates are based on past performance and management’s expectations of market development. A long-term growth rate to perpetuity has been determined taking into account forecasts included in industry reports. Discount rates represent the current market assessment of the risks specific to each CGU. The discount rate is derived from the capital asset pricing model (CAPM). The cost of equity is derived from the expected return on investment by the Group’s investors, specific risk incorporated by applying individual comparable beta factors adjusted by the debt structure of each CGU and country and market risk specific premiums to each CGU. The beta factors are evaluated annually based on publicly available market data. During the year 2015, the Group recorded a gross impairment loss amounting to S/82.4 million (S/0.1 million during the year 2016), as a result of the assessment of the recoverable amount of the CGU “Inversiones IMT”, amounting to S/234.3 million, decreasing in relation to prior years due to the lower revenues generated compared to those originally budgeted by Management and for the changes expected in the payment of taxes attributable to the parent company resulting from the tax law reform presented in Chile. The key assumptions described above may change if the conditions of the economy and market change. At December 31, 2017, the Group estimates that reasonably possible changes in these assumptions would not cause the recoverable amount of all CGUs to decline below their carrying amount.

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