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13. INTANGIBLE ASSETS | 12 Months Ended
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Dec. 31, 2020
Intangible assets and goodwill [abstract] |
INTANGIBLE ASSETS |
13. | INTANGIBLE ASSETS
The intangible assets rollforward is set forth below:
| Average rate (1) |  | 12.31.19 |  | Additions |  | Disposals |  | Transfers (2) |  | Exchange rate variation |  | 12.31.20
Cost |  |  |  |  |  |  |  |  |  |  |  |  |
Goodwill |  |  | 2,713,602 |  | - |  | - |  | (6,970) |  | 228,945 |  | 2,935,577
Trademarks |  |  | 1,322,262 |  | - |  | - |  | - |  | 5,476 |  | 1,327,738
Non-compete agreement |  |  | 99,229 |  | 413 |  | (379) |  | - |  | 7,899 |  | 107,162
Outgrowers relationship |  |  | 14,604 |  | - |  | (9,276) |  | - |  | - |  | 5,328
Patents |  |  | 6,305 |  | - |  | (115) |  | - |  | 15 |  | 6,205
Customer relationship |  |  | 892,758 |  | - |  | - |  | - |  | 174,955 |  | 1,067,713
Software |  |  | 523,615 |  | 73,423 |  | (45,851) |  | 97,117 |  | 8,951 |  | 657,255
Intangible in progress |  |  | 12,151 |  | 95,111 |  | - |  | (61,434) |  | 226 |  | 46,054
|  |  | 5,584,526 |  | 168,947 |  | (55,621) |  | 28,713 |  | 426,467 |  | 6,153,032
Amortization |  |  |  |  |  |  |  |  |  |  |  |  |
Non-compete agreement | 23.41% |  | (74,190) |  | (18,784) |  | 379 |  | - |  | (4,813) |  | (97,408)
Outgrowers relationship | 12.75% |  | (12,744) |  | (1,030) |  | 9,079 |  | - |  | - |  | (4,695)
Patents | 10.00% |  | (5,626) |  | (476) |  | 115 |  | - |  | (12) |  | (5,999)
Customer relationship | 7.35% |  | (242,263) |  | (79,969) |  | - |  | - |  | (52,899) |  | (375,131)
Software | 34.22% |  | (341,624) |  | (153,288) |  | 43,718 |  | 9,562 |  | (8,065) |  | (449,697)
|  |  | (676,447) |  | (253,547) |  | 53,291 |  | 9,562 |  | (65,789) |  | (932,930)
|  |  | 4,908,079 |  | (84,600) |  | (2,330) |  | 38,275 |  | 360,678 |  | 5,220,102
(1) | Weighted average annual rate.
(2) | Related to transfer of R$6,970 to assets held for sales.
| Average rate (1) |  | 12.31.18 |  | Initial adoption IFRS 16 |  | Additions |  | Disposals |  | Transfers |  | Exchange rate variation |  | 12.31.19
Cost |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Goodwill for future profitability |  |  | 2,694,967 |  | - |  | - |  | - |  | - |  | 18,635 |  | 2,713,602
Trademarks |  |  | 1,336,162 |  | - |  | - |  | - |  | - |  | (13,900) |  | 1,322,262
Non-compete agreement |  |  | 90,012 |  | - |  | 8,105 |  | - |  | - |  | 1,112 |  | 99,229
Outgrowers relationship |  |  | 15,022 |  | - |  | - |  | (418) |  | - |  | - |  | 14,604
Patents |  |  | 6,066 |  | - |  | - |  | - |  | 235 |  | 4 |  | 6,305
Customer relationship |  |  | 896,039 |  | - |  | - |  | - |  | - |  | (3,281) |  | 892,758
Software |  |  | 491,830 |  | 61 |  | 38,259 |  | (95,275) |  | 87,576 |  | 1,164 |  | 523,615
Intangible in progress |  |  | - |  | - |  | 47,422 |  | - |  | (35,294) |  | 23 |  | 12,151
|  |  | 5,530,098 |  | 61 |  | 93,786 |  | (95,693) |  | 52,517 |  | 3,757 |  | 5,584,526
Amortization |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Non-compete agreement | 33.67% |  | (45,802) |  | - |  | (27,811) |  | - |  | - |  | (577) |  | (74,190)
Outgrowers relationship | 13.02% |  | (11,552) |  | - |  | (1,546) |  | 354 |  | - |  | - |  | (12,744)
Patents | 19.05% |  | (5,149) |  | - |  | (470) |  | - |  | - |  | (7) |  | (5,626)
Customer relationship | 7.31% |  | (172,450) |  | - |  | (67,137) |  | - |  | - |  | (2,676) |  | (242,263)
Software | 23.18% |  | (275,747) |  | - |  | (141,925) |  | 77,027 |  | (10) |  | (969) |  | (341,624)
|  |  | (510,700) |  | - |  | (238,889) |  | 77,381 |  | (10) |  | (4,229) |  | (676,447)
|  |  | 5,019,398 |  | 61 |  | (145,103) |  | (18,312) |  | 52,507 |  | (472) |  | 4,908,079
| (1) | Weighted average annual rate.
13.1. | Impairment test
The impairment test of assets is carried out annually based on the discounted cash flow method, which is prepared in order to determine the value in use of the Company’s cash-generating units (“CGU”). In 2020, the Company used its budget, strategic and financial planning with projections until 2025 and average perpetuity of the cash generating units of 3.25% p.a., based on the history of recent years, as well as in the economic and financial projections of each market in which the Company operates, in addition to official information from independent and governmental institutions. The discount rate used by Management to prepare discounted cash flows varied from 11.21% p.a. to 13.22% p.a. according to the CGU. The assumptions presented in the table below were also adopted:
|  | 2021 |  | 2022 |  | 2023 |  | 2024 |  | 2025
Inflation Brazil |  | 2.84% |  | 3.50% |  | 3.56% |  | 3.55% |  | 3.40%
Inflation - United States |  | 2.59% |  | 2.56% |  | 2.53% |  | 2.51% |  | 2.48%
Exchange rate - BRL / USD |  | 4.89 |  | 4.32 |  | 4.07 |  | 3.95 |  | 3.87
The rates presented above don’t consider the effects of income taxes. Based on Management’s analysis, no impairment adjustments were identified. In addition to the analysis mentioned above, Management prepared a deterministic sensitivity analysis considering the variations in the Earnings Before Interest and Tax (“EBIT”) margin and in the nominal discount rate as presented below:
|  |  | Variations |  |
Apreciation (devaluation) | 1.0% |  | 0.0% |  | (1.0%)
BRAZIL CGU |  |  |  |  |
Discount rate | 14.22% |  | 13.22% |  | 12.22%
Ebit Margin | 13.76% |  | 12.76% |  | 11.76%
INTERNATIONAL CGU´s |  |  |  |  |
Discount rate | 12.21% |  | 11.21% |  | 10.21%
Ebit Margin | 11.77% |  | 10.77% |  | 9.77%
The Company, in its sensitivity analysis, did not identify any scenarios in which an impairment was necessary.

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