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INTANGIBLE ASSETS (Tables)
 12 Months Ended
Dec. 31, 2021
Schedule of intangible assets

 

                          Consolidated
  Goodwill   Customer relationships   Software   Trademarks
and
patents		   Rights and licenses (*)   Others   Total
Balance at December 31, 2019 3,606,156    246,139     53,859   153,103     3,170,960   1,564   7,231,781
 Cost   3,846,563     585,407    171,152    153,103   3,189,789    1,564    7,947,578
 Accumulated amortization  (131,077)    (339,268)   (117,293)      (18,829)       (606,467)
 Adjustment for accumulated recoverable value  (109,330)                      (109,330)
Balance at December 31, 2019 3,606,156    246,139     53,859   153,103     3,170,960   1,564   7,231,781
Effect of foreign exchange differences      94,998    584     62,429        638   158,649
Acquisitions and expenditures           1,837               1,837
Transfer of property, plant and equipment           633     4,000        4,633
Amortization (note 27)        (63,096)    (11,248)       (5,611)        (79,955)
Others                   (151)     (151)
Balance at December 31, 2020 3,606,156    278,041     45,665   215,532     3,169,349   2,051   7,316,794
 Cost   3,846,563     823,540    182,059    215,532   3,193,787    2,051    8,263,532
 Accumulated amortization  (131,077)    (545,499)   (136,394)      (24,438)       (837,408)
 Adjustment for accumulated recoverable value  (109,330)                      (109,330)
Balance at December 31, 2020 3,606,156    278,041     45,665   215,532     3,169,349   2,051   7,316,794
Effect of foreign exchange differences       (1,835)    (24)   (1,923)         (18)     (3,800)
Acquisitions and expenditures           3,302      27        3,329
Transfer of property, plant and equipment            29,840                29,840
Amortization (note 27)        (68,294)    (12,343)     (21,843)          (102,480)
Disposals                    (63)    (63)
Transfers to other asset categories   39,814           (39,814)          
Business Combination Elizabeth (note 4)   83,266             330,164        413,430
Balance at December 31, 2021 3,729,236    207,912     66,440   213,609     3,437,883   1,970   7,657,050
 Cost  3,969,643    816,206   221,712   213,609     3,484,778   1,970   8,707,918
 Accumulated amortization    (131,077)   (608,294)     (155,272)     (46,895)          (941,538)
 Adjustment for accumulated recoverable value    (109,330)                       (109,330)
Balance at December 31, 2021 3,729,236    207,912     66,440   213,609     3,437,883   1,970   7,657,050
(*)Composed mainly of mining rights. Amortization is based on production volume.
Schedule of average useful life by nature

The average useful life by nature is as follows (in years):

 

Schedule of average useful life by nature

 

      Consolidated
  12/31/2021   12/31/2020
Software 9   9
Customer relationships 13   13
The CGUs with intangible assets in this situation are shown below:

Goodwill arising from expected future profitability of acquired companies and intangible assets with indefinite useful lives (brands) were allocated to CSN’s cash generating units (CGUs) which represent the lowest level of assets or group of assets of the Company. According to IAS36, when a CGU has an intangible asset with no defined useful life allocated, the Company must perform an impairment test. The CGUs with intangible assets in this situation are shown below:

 

                            Consolidated
        Goodwill Trademarks Total
Cash generating unity   Segment   12/31/2021   12/31/2020   12/31/2021   12/31/2020   12/31/2021   12/31/2020
             
Packaging (1)    Steel          158,748         158,748                 158,748         158,748
Long steel (2)    Steel          235,595         235,595         213,609          215,532         449,204         451,127
Mining (3)    Mining        3,236,402       3,196,588               3,236,402       3,196,588
Other Steel (4)    Steel            15,225           15,225                   15,225           15,225
Cements (5)    Cement            83,266                                        83,266                     
            3,729,236       3,606,156         213,609          215,532       3,942,845       3,821,688

 

(1)The goodwill of the Packaging cash-generating unit is shown net of impairment loss in the amount of R$109,330, recognized in 2011.

(2)The goodwill and trademark that are recorded in line-item intangible assets at long steel segment, those transactions are derived from the business combination of Stahlwerk Thuringen GmbH ("SWT") and Gallardo Sections CSN. The assets mentioned are considered to have indefinite useful lives as they are expected to contribute indefinitely to the Company's cash flows.

(3)Refers to the goodwill based on expectations for future profitability, resulting from the acquisition of Namisa by CSN Mineração concluded in December 2015, which recoverability is tested annually.

 

(4)On November 29, 2019, CSN acquired the stake held by CKTR Brasil Serviços Ltda., corresponding to 50% of CBSI's shares, and now holds 100% of CBSI's share capital.

 

(5)In the acquisition of Elizabeth Cimentos S.A. in August 2021 goodwill was generated for future profitability in the acquirer CSN Cimentos S.A..
Schedule of main assumptions for intangible asstes impairment

 

   Packaging   Mining   Other Steelmaking   Flat Steel (*)   Flat Steel (*)  Logistics Cement
Measurement of recoverable value Discounted Cash Flow Discounted Cash Flow Discounted Cash Flow Discounted Cash Flow Discounted Cash Flow Discounted Cash Flow Discounted Cash Flow
Cash flow projection Until 2031 + perpetuity Until 2064 Until 2031 + perpetuity Until 2031 + perpetuity Until 2034 + perpetuity Until 2027 by 2050
Gross Margin Gross margin updated based on
historical data, impacts of
business restructuring and
market trends		 It reflects projection of costs due to the progress of the mining plan as well as startup and project ramp up. Prices and exchange rates projected according to sectoral reports. Gross margin updated based on historical data and market trends Gross margin updated based on historical data and market trends Gross margin updated based on historical data and market trends Estimated based on market study to capture cargo and operating costs according to market trend studies Gross margin updated based on historical data and market trends
Cost atualization Cost based on historical data of
each product and impacts of
business restructuring		 Update of costs based on historical data, progress of the mining plan as well as startup and project ramp up Updated costs based on historical data and market trends Updated costs based on historical data and market trends Updated costs based on historical data and market trends Study-based costs and market trends Study-based costs and market trends
Perpetual growth rate 1% growth. Without perpetuity Without growth Without growth Without growth Without perpetuity Without perpetuity
Discount rate For metal packaging, the cash flow considered a discount rate around 9,22% p.a. in real terms. For mining, flat steel and other steel (CBSI), cash flows considered a discount rate between 7% and 9.5% p.a. in nominal terms. For the logistic segment, cash flow was discounted using a discount rate between 5.87% and 6.40% p.a. in real terms. The discount rate was based on the weighted average cost of capital ("WACC") that reflects the specific risk of each segment.

 

(*)refer to the assets of the subsidiary Lusosider, located in Portugal, and the assets of Stahlwerk Thüringen (SWT) located in Germany. The discount rate was applied to the discounted cash flow prepared in Euros, the functional currency of this subsidiary.

 

(**)refer to the assets of the subsidiary FTL - Ferrovia Transnordestina Logística SA