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Intangible assets (Tables)
 12 Months Ended
Dec. 31, 2021
Intangible Assets [Abstract]  
Summary of intangible assets
Year ended 31 December 2021
Exploration
and
evaluation(a)
US$m
Trademarks, patented and
non-patented technology
US$m
Contract based intangible
assets(b)
US$m
Other
intangible
assets
US$m		Total
US$m
Net book value
At 1 January 2021271 33 1,994 457 2,755 
Adjustment on currency translation(14)(2)(11)(21)(48)
Expenditure during the year110 5 — 110 225 
Amortisation for the year(c)
— (14)(10)(154)(178)
Disposals, transfers and other movements(4)— 35 47 78 
At 31 December 2021363 22 2,008 439 2,832 
– cost2,513 220 3,089 1,725 7,547 
– accumulated amortisation and impairment(2,150)(198)(1,081)(1,286)(4,715)
Year ended 31 December 2020
Exploration
and
evaluation(a)
US$m
Trademarks, patented and
non-patented technology
US$m
Contract based intangible
assets(b)
US$m
Other
intangible
assets
US$m		Total
US$m
Net book value
At 1 January 2020173 44 1,947 473 2,637 
Adjustment on currency translation17 3 56 35 111 
Expenditure during the year87 — — 69 156 
Amortisation for the year(c)
— (14)(8)(139)(161)
Impairment charges— — — (4)(4)
Disposals, transfers and other movements(6)— (1)23 16 
At 31 December 2020271 33 1,994 457 2,755 
– cost2,415 232 3,070 1,710 7,427 
– accumulated amortisation and impairment(2,144)(199)(1,076)(1,253)(4,672)
At 31 December 2021, a total of US$272 million of capitalised exploration and evaluation spend within intangible assets relates to brownfield expansion of existing sites (31 December 2020: US$180 million).
(a)Exploration and evaluation assets’ useful economic lives are not determined until transferred to property, plant and equipment.
(b)The Group benefits from certain intangible assets acquired with Alcan, including power supply contracts, customer contracts and water rights. The water rights are expected to contribute to the efficiency and cost effectiveness of operations for the foreseeable future; accordingly, these rights are considered to have indefinite lives and are not subject to amortisation but are tested annually for impairment. These water rights constitute the majority of the amounts in “Contract based intangible assets”.
The remaining carrying value of the water rights of US$1,796 million as at 31 December 2021 (31 December 2020: US$1,798 million) relates wholly to the Quebec smelters cash-generating unit (CGU). The Quebec smelters CGU was tested for impairment by reference to FVLCD using discounted cash flows, which is in line with the policy set out in note 1(i). The recoverable amount of the Quebec smelters is classified as level 3 under the fair value hierarchy. In arriving at FVLCD, post-tax cash flows expressed in real terms have been estimated over the expected useful economic lives of the underlying smelting assets and discounted using a real post-tax discount rate of 6.6% (2020: 6.6%).
The recoverable amounts were determined to be significantly in excess of carrying value, and there are no reasonably possible changes in key assumptions that would cause the remaining water rights to be impaired.
(c)Finite life intangible assets are amortised over their useful economic lives on a straight line or units of production basis, as appropriate. Where amortisation is calculated on a straight line basis, the following useful lives have been determined:
Trademarks, patented and non-patented technology:
–Trademarks: 14 to 20 years
–Patented and non-patented technology: ten to 20 years
Contract-based intangible assets:
–Power contracts/water rights: two to 45 years
–Other purchase and customer contracts: five to 15 years
Other intangible assets:
–Internally generated intangible assets and computer software: two to five years
–Other intangible assets: two to 20 years
Summary of exploration and evaluation expenditure The charge for the year and the net amount of intangible assets capitalised during the year are as follows:
2021
US$m
2020
US$m
2019
US$m
Net expenditure in the year (net of cash proceeds of US$7 million (2020: US$1 million; 2019: US$10 million) on disposal of undeveloped projects)
(852)(711)(671)
Non-cash movements and non-cash proceeds on disposal of undeveloped projects23 — — 
Amount capitalised during the year110 87 57 
Net charge for the year
(719)(624)(614)
Reconciliation to income statement:
Exploration and evaluation costs(726)(625)(624)
Profit relating to interests in undeveloped projects7 1 10 
Net charge for the year
(719)(624)(614)