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Intangible Assets and Goodwill | 12 Months Ended
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Dec. 31, 2022
Intangible Assets and Goodwill |
Intangible Assets and Goodwill | 14 Intangible Assets and Goodwill The cost, weighted average amortization rates and accumulated amortization of intangible assets and goodwill comprise the following amounts:
|  |  | December 31, 2022 |  | December 31, 2021 |
| Weighted average amortization rate |  | Cost |  |  | Accumulated amortization |  |  | Net book value |  |  | Cost |  |  | Accumulated amortization |  |  | Net book value |
Software | 20% |  | 263,433 |  |  | (182,711 | ) |  | 80,722 |  |  | 247,326 |  |  | (151,281 | ) |  | 96,045 |
Customer Portfolio | 8% |  | 1,201,074 |  |  | (377,891 | ) |  | 823,183 |  |  | 1,197,381 |  |  | (275,276 | ) |  | 922,105 |
Trademarks | 5% |  | 631,582 |  |  | (112,967 | ) |  | 518,615 |  |  | 632,016 |  |  | (85,658 | ) |  | 546,358 |
Trade Agreement | 8% |  | 247,622 |  |  | (28,795 | ) |  | 218,827 |  |  | 247,622 |  |  | (4,127 | ) |  | 243,495 |
Platform content production | 33% |  | 123,251 |  |  | (74,881 | ) |  | 48,370 |  |  | 73,877 |  |  | (49,583 | ) |  | 24,294 |
Other Intangible assets | 33% |  | 39,422 |  |  | (32,142 | ) |  | 7,280 |  |  | 39,421 |  |  | (32,140 | ) |  | 7,281 |
In progress |  |  | 18,958 |  |  | - |  |  | 18,958 |  |  | 3,991 |  |  | - |  |  | 3,991 |
Goodwill |  |  | 3,711,721 |  |  | - |  |  | 3,711,721 |  |  | 3,694,798 |  |  | - |  |  | 3,694,798 |
|  |  | 6,237,063 |  |  | (809,387 | ) |  | 5,427,676 |  |  | 6,136,432 |  |  | (598,065 | ) |  | 5,538,367 |
Changes in intangible assets and goodwill were as follows:
| Software |  |  | Customer Portfolio |  |  | Trademarks |  |  | Trade Agreement |  |  | Platform content production |  |  | Other Intangible assets |  |  | In progress |  |  | Goodwill |  |  | Total |
As of December 31, 2021 (i) | 96,045 |  |  | 922,105 |  |  | 546,358 |  |  | 243,495 |  |  | 24,294 |  |  | 7,281 |  |  | 3,991 |  |  | 3,694,798 |  |  | 5,538,367 |
Additions | 12,881 |  |  | - |  |  | - |  |  | - |  |  | 62,722 |  |  | 17 |  |  | 14,967 |  |  | - |  |  | 90,587 |
Additions through business combinations | 3,225 |  |  | 3,833 |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 16,923 |  |  | 23,981 |
Disposals | - |  |  | (140 | ) |  | (434 | ) |  | - |  |  | (13,348 | ) |  | (15 | ) |  | - |  |  | - |  |  | (13,937 | )
Amortization | (31,430 | ) |  | (102,615 | ) |  | (27,309 | ) |  | (24,668 | ) |  | (25,298 | ) |  | ( 3 | ) |  | - |  |  | - |  |  | (211,323 | )
As of December 31, 2022 | 80,722 |  |  | 823,183 |  |  | 518,615 |  |  | 218,827 |  |  | 48,370 |  |  | 7,280 |  |  | 18,958 |  |  | 3,711,721 |  |  | 5,427,676 |
(i) | Considers the review of goodwill and intangibles assets of the acquisition of EMME and Redação Nota Mil, acquired during the year 2021.
| Software |  |  | Customer Portfolio |  |  | Trademarks |  |  | Trade Agreement |  |  | Platform content production (i) |  |  | Other intangible assets |  |  | In progress |  |  | Goodwill (ii) |  |  | Total |
As of December 31, 2020 | 83,414 |  |  | 928,858 |  |  | 573,586 |  |  | - |  |  | 23,821 |  |  | 6,243 |  |  | 999 |  |  | 3,307,805 |  |  | 4,924,726 |
Additions | 25,560 |  |  | - |  |  | - |  |  | - |  |  | 20,808 |  |  | 39 |  |  | 9,509 |  |  | - |  |  | 55,916 |
Additions through business combinations | 11,036 |  |  | 83,589 |  |  | - |  |  | 247,622 |  |  | - |  |  | 1,099 |  |  | - |  |  | 387,074 |  |  | 730,419 |
Amortization | (30,482 | ) |  | (90,342 | ) |  | (27,309 | ) |  | (4,127 | ) |  | (20,335 | ) |  | (100 | ) |  | - |  |  | - |  |  | (172,695 | )
Transfers | 6,517 |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | (6,517 | ) |  | - |  |  | - |
As of December 31, 2021 | 96,045 |  |  | 922,105 |  |  | 546,277 |  |  | 243,495 |  |  | 24,294 |  |  | 7,281 |  |  | 3,991 |  |  | 3,694,879 |  |  | 5,538,367 |
(i) | Substantially refers to development of the projects related to Plurall Platform. The Company has invested in changes in its digital platform that include “Plurall Digital Transformation” in the amount of R$ 20,808 million, and project related to learning systems, in the amount of R$ 9,509 million.
(ii) | The Company recognized R$ 387,074 as goodwill on SEL, Redação Nota 1000, EMME and De Gouges acquisition, see Note 5.
(i) | Goodwill impairment test
The Company performed its annual impairment test in 2022 and 2021 The Company also carried out a sensitivity analysis in the long-term model and cash flows. The conclusion of these tests conducted by the Company for the years ended December 31, 2022 and 2021, showed that no adjustments were required to these assets. The Company is comprised of two separate CGUs (each one of its reportable operating segments, as per Note 28), for which the recoverable amount has been determined based on value-in-use calculations, Goodwill is allocated to each CGU as shown below:
| December 31, 2022 |  |  | December 31, 2021 |
Content and Edtech Platform | 3,674,034 |  |  | 3,674,036 |
Digital Platform | 37,687 |  |  | 20,843 |
| 3,711,721 |  |  | 3,694,879 |
The recoverable amount of a CGU has been determined based on value-in-use calculations. These calculations use pre-income tax and social contribution cash flow projections based on financial budget approved by management covering a period of eight years. Cash Flows beyond that period are extrapolated using growth rates. The growth rate does not exceed the long-term average growth rate for the business that CGU operates. For each of the CGUs, the key assumptions, long-term growth rate and discount rate used in the value-in-use calculations are stated in the table below. In addition, the recoverable amount is also disclosed in the table. The key assumptions used for value-in-use calculations as of December 31, 2022 and 2021 are as follows:
|  |  |  | 2022 |  |  |  |  |  | 2021 |
| Content and EdTech Platform |  |  | Digital Platform |  |  | Content and EdTech Platform |  |  | Digital Platform |
Growth rate - % | 13.70 | % |  | 12.5 | % |  | 14.40 | % |  | 9.7 | %
Discount rate - % | 12.10 | % |  | 12.10 | % |  | 10.81 | % |  | 10.81 | %
Growth rate (%) in perpetuity | 4.7 | % |  | 4.7 | % |  | 5.8 | % |  | 5.8 | %
Years projected | 8 |  |  | 8 |  |  | 8 |  |  | 8 |
Growth rate is based on assumptions defined by the Company’s management, underpinned by business performance compared with other competitors and based on internal measures (new initiatives and services provided) taken into consideration. The discount rate is determined by individual WACC (weighted average working capital), net of income taxes. The assumptions of the long-term model used in the impairment test calculation were assessed and approved by the Business’ Management, as well as the rates used.
(ii) | Impairment of other intangible assets and in progress
There were no indications of impairment of intangible assets for the years ended December 31, 2022 and 2021. Additionally, intangible assets stated as “in progress” were assessed for impairment by comparing its carrying amount with its recoverable amount and no adjustments were considered necessary.

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