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Intangible assets excluding goodwill | 12 Months Ended
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Dec. 31, 2023
Intangible assets excluding goodwill [Abstract] |
Intangible assets excluding goodwill [Text Block] | ### 12Intangible assets excluding goodwill ###### Accounting policies Acquired finite-lived intangible assets are amortized using the straight-line method over their estimated useful life. The useful lives are evaluated annually. Intangible assets are initially capitalized at cost, with the exception of intangible assets acquired as part of a business combination, which are capitalized at their acquisition date fair value. The company expenses all research costs as incurred. Expenditure on development activities, whereby research findings are applied to a plan or design for the production of new or substantially improved products and processes, is capitalized as an intangible asset if the product or process is technically and commercially feasible, the company has sufficient resources and the intention to complete development and can measure the attributable expenditure reliably. The capitalized development expenditure comprises of all directly attributable costs (including the cost of materials and direct labor). Other development expenditures and expenditures on research activities are recognized in the Consolidated statements of income. Capitalized development expenditure is stated at cost less accumulated amortization and impairment losses. Amortization of capitalized development expenditure is charged to the Consolidated statements of income on a straight-line basis over the estimated useful lives of the intangible assets. The expected useful lives of the intangible assets excluding goodwill are as follows: Philips Group Expected useful lives of intangible assets excluding goodwill in years
Brand names | 2-20
Customer relationships | 2-25
Technology | 3-20
Other | 1-10
Software | 1-10
Product development | 3-10
The weighted average expected remaining life of brand names, customer relationships, technology and other intangible assets is 9.3 years as of December 31, 2023 (2022: 9.4 years). ###### Impairment of intangible assets not yet ready for use Intangible assets not yet ready for use are not amortized but are tested for impairment annually and whenever impairment indicators require. In the case of intangible assets not yet ready for use, either internal or external sources of information are considered to assess if there are indicators that an asset or a CGU may be impaired. ###### Impairment of non-financial assets other than goodwill, intangible assets not yet ready for use, inventories and deferred tax assets Non-financial assets other than goodwill, intangible assets not yet ready for use, inventories and deferred tax assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is assessed by a comparison of the carrying amount of an asset with the greater of its value in use and fair value less cost of disposal. Value in use is measured as the present value of future cash flows expected to be generated by the asset. Fair value less cost of disposal is measured as the amount obtained from a sale of an asset in an arm’s length transaction, less costs of disposal. If the carrying amount of an asset is deemed not recoverable, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the recoverable amount. The review for impairment is carried out at the level where cash flows occur that are independent of other cash flows. Impairment losses recognized in prior periods for Intangible assets other than goodwill are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if and to the extent that there has been a change in the estimates used to determine the recoverable amount. The loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized. Reversals of impairment are recognized in the Consolidated statements of income. ###### Accounting estimates and judgments The cash flow projections used in the value in use calculations for intangible assets excluding goodwill contain various judgments and estimations. For intangible assets excluding goodwill, estimates are required to determine the (remaining) useful lives. Philips Group Intangible assets excluding goodwill in millions of EUR
| brand names | customer relationships | technology | product development | product development construction in progress | software | other | total
--- | --- | --- | --- | --- | --- | --- | --- | ---
Balance as of January 1, 2023 |  |  |  |  |  |  |  |
Cost | 647 | 2,735 | 2,947 | 2,605 | 648 | 869 | 152 | 10,602
Amortization / impairments | (507) | (1,665) | (1,845) | (2,212) | (146) | (589) | (113) | (7,077)
Book value | 140 | 1,070 | 1,102 | 393 | 502 | 280 | 39 | 3,526
Additions |  |  | 33 | - | 214 | 70 | - | 317
Assets available for use |  |  |  | 157 | (157) |  |  |
Acquisitions |  |  | 40 | - |  | - |  | 40
Amortization | (20) | (137) | (131) | (169) |  | (97) | (1) | (556)
Impairments | - | - | - | (7) | (7) | (1) | - | (16)
Transfers to assets classified as held for sale | (1) | (20) |  |  | (8) | (2) |  | (32)
Translation differences and other | (1) | (37) | (30) | (38) | 1 | 18 | - | (87)
Total change | (22) | (195) | (89) | (57) | 42 | (13) | (1) | (335)
Balance as of December 31, 2023 |  |  |  |  |  |  |  |
Cost | 629 | 2,593 | 2,908 | 2,432 | 635 | 929 | 139 | 10,265
Amortization / impairments | (511) | (1,718) | (1,895) | (2,096) | (91) | (662) | (101) | (7,075)
Book Value | 118 | 875 | 1,013 | 336 | 544 | 267 | 38 | 3,190
Philips Group Intangible assets excluding goodwill in millions of EUR
| brand names | customer relationships | technology | product development | product development construction in progress | software | other | total
--- | --- | --- | --- | --- | --- | --- | --- | ---
Balance as of January 1, 2022 |  |  |  |  |  |  |  |
Cost | 644 | 2,590 | 2,605 | 2,701 | 505 | 754 | 146 | 9,944
Amortization / impairments | (481) | (1,447) | (1,605) | (2,102) | (91) | (467) | (101) | (6,294)
Book value | 162 | 1,143 | 1,000 | 599 | 414 | 287 | 44 | 3,650
Additions | (3) | - | 51 | - | 257 | 109 | 1 | 416
Assets available for use |  |  |  | 118 | (118) | - | - | -
Acquisitions | 1 | 3 | 177 | - |  | - | - | 180
Amortization | (24) | (141) | (140) | (206) | (1) | (100) | (3) | (614)
Impairments | - | (6) | (46) | (123) | (81) | (17) | (2) | (276)
Translation differences and other | 4 | 71 | 59 | 5 | 31 | 1 | (2) | 169
Total change | (22) | (74) | 102 | (206) | 88 | (7) | (6) | (125)
Balance as of December 31, 2022 |  |  |  |  |  |  |  |
Cost | 647 | 2,735 | 2,947 | 2,605 | 648 | 869 | 152 | 10,602
Amortization / impairments | (507) | (1,665) | (1,845) | (2,212) | (146) | (589) | (113) | (7,077)
Book Value | 140 | 1,070 | 1,102 | 393 | 502 | 280 | 39 | 3,526
Acquisitions in 2023 involved intangible assets of EUR 40 million in aggregate (2022: EUR 180 million). For more information, refer to Acquisitions and divestments. Impairments in 2023 were EUR 16 million (2022: EUR 276 million) and mainly relate to product development construction in progress and product development. The company uses scenarios in the business forecasting process and the most reasonable and supportable assumptions which represent management’s best estimate are used as the basis for the value-in-use calculations. The amortization and impairment of intangible assets is further specified in Income from operations. The most notable intangible assets as of December 31, 2023 relate to the BioTelemetry customer relationships and technology with a carrying value of EUR 327 million and EUR 123 million and a remaining amortization period of 13 years and 9 years, respectively and Spectranetics customer relationships and technology with a carrying value of EUR 261 million and EUR 175 million and a remaining amortization period of 14 years and 9 years, respectively. The most notable intangible assets as of December 31, 2022 relate to the BioTelemetry customer relationships and technology with value of EUR 385 million and EUR 150 million and a remaining amortization period of 14 years and 10 years, respectively and Spectranetics customer relationships and technology with a carrying value of EUR 291 million and EUR 203 million and a remaining amortization period of 15 years and 10 years, respectively.

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