Annual and transition report of foreign private issuers pursuant to Section 13 or 15(d)

Intangible assets, net

v3.21.1
Intangible assets, net
 12 Months Ended
Jan. 03, 2021
Intangible assets, net [Abstract]  
Intangible assets, net
12. Intangible assets, net

Acquisition cost:   As of
January 1,
2019		     Additions     Disposals     As of
December 31,
2019		  
                         
Brand   Ps. 253,000       -       -       253,000  
Customer relationships     64,000       -       -       64,000  
Software     17,135       4,516       -       21,651  
Brands and logo rights     6,209       1,399       -       7,608  
                                 
    Ps. 340,344       5,915       -       346,259  

Accumulated amortization:   As of
January 1,
2019		     Amortization
expense		     Eliminated
on disposals		     As of
December 31,
2019		  
                         
Customer relationships   Ps. (24,533 )     (6,400 )         -       (30,933 )
Software     -       (421 )     -       (421 )
Brands and logo rights     (3,712 )     (228 )     -       (3,940 )
                                 
    Ps. (28,245 )     (7,049 )     -       (35,294 )

Acquisition cost:   As of
December 31,
2019		     Additions     Disposals     As of
January 3,
2021		  
                         
Brand   Ps. 253,000       -          -       253,000  
Customer relationships     64,000       -       -       64,000  
Software     21,651       24,333       -       45,984  
Brands and logo rights     7,608       276       (2,491 )     5,393  
                                 
    Ps. 346,259       24,609       (2,491 )     368,377  

Accumulated amortization:   As of
December 31,
2019		     Amortization
expense		     Eliminated
on disposals		     As of
January 3,
2021		  
                         
Customer relationships   Ps. (30,933 )     (6,400 )         -       (37,333 )
Software     (421 )     (6,675 )     -       (7,096 )
Brands and logo rights     (3,940 )     (647 )     -       (4,587 )
                                 
    Ps. (35,294 )     (13,722 )     -       (49,016 )

As of January 3, 2021 and December 31, 2019, a carrying amount of Ps. 253,000 for the value of “Betterware” brand is presented in the consolidated and combined statements of financial position. Such brand was transmitted to the Group through a merger carried out on July 28, 2017 with Strevo (a related party, under common control). Strevo obtained such brand when acquiring the majority of the Group’s shares in March 2015.


As of January 3, 2021 and December 31, 2019, a carrying amount of Ps. 26,667 and Ps. 33,067, respectively, for the value of the Group’s intangible asset comprised of relationships with customers, is presented in the consolidated and combined statements of financial position. Such intangible asset was transmitted to the Group through the merger carried out on July 28, 2017 with Strevo as previously discussed. This intangible asset has a useful life of ten years and is being amortized on a straight-line basis.


Additionally, as of January 3, 2021 and December 31, 2019, the intangible asset line in the consolidated and combined statement of financial position includes Ps. 806 and Ps. 3,668, respectively, corresponding to paid rights related to registration of brands and logos before the intellectual property authorities. Such rights are valid ranging a defined period from 10 to 30 years and therefore, are amortized over such useful lives.


At each reporting date, the Group reviews the carrying amounts of its non-financial assets to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. As of January 3, 2021 and December 31, 2019, no indications of impairment have been identified.


In relation to impairment of intangible assets with indefinite useful life (brand), the Group estimates the recoverable amount of the intangible asset which is based on fair value less costs of disposal, estimated using discounted cash flows. The fair value measurement was categorized as a Level 3 fair value based on the inputs in the valuation technique used. Key assumptions are the same as those used for estimating the recoverable amount for Goodwill. See Note 11.