SECTION 5.1  Acquisition of subsidiaries 5.1  SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS (CONTINUED) 5.1  ACCOUNTING POLICIES CUSTOMER AGREEMENTS  AND PORTFOLIOS FAIR VALUE OF PROPERTY, PLANT AND EQUIPMENT  Step acquisitions  Non-controlling interests in a business combination  markets are expected to be profitable for a  long period, the useful life of the trademark is determined to be indefinite.  For each trademark or group of trademarks,  measurement is based on the relief from  royalty method under which the value is  calculated based on expected future cash  flows for the trademarks on the basis of key  assumptions about expected useful life, roy- alty rate and growth rate and a theoretically  calculated tax effect. A post-tax discount  rate is used which reflects the risk-free inter- est rate with the addition of a risk premium  associated with the particular trademark.  The model and assumptions applied are  consistent with those used in impairment  testing and described in further detail in  section 2.3.3.  In business combinations, the value of ac- quired customer agreements and customer  portfolios is assessed based on the local  market and trading conditions. The relation- ship between trademarks and customers is  carefully considered so that trademarks and  customer agreements are not both recognised  on the basis of the same underlying cash  flows. Usually there is a particularly close  relationship between trademarks and sales. In these cases, no separate value for cus- tomer relations is recognised as the relations  are closely associated with the value of the  acquired trademarks. In business combinations, the fair value of land and buildings, and standard pro- duction and office equipment is based, as  far as possible, on the fair value of assets  of similar type and condition that may be  bought and sold in the open market. Property, plant and equipment for which there is no reliable evidence of  the fair value in the market (in particular  breweries, including production equip- ment) are valued using the depreciated  replacement cost method. This method is based on the replace- ment cost of a similar asset with similar  functionality and capacity. The calculated  replacement cost for each asset is then  reduced to reflect functional and physical  obsolescence. The expected synergies and the user-specific intentions for the  expected use of assets are not included in the determination of the fair value. For acquisitions of new subsidiaries, joint ventures  and associates, the acquisition method is used. The  acquired entities’ identifiable assets, liabilities and  contingent liabilities are measured at fair value at the  acquisition date. Identifiable intangible assets are rec- ognised if they are separable or arise from a contrac- tual right. Deferred tax on revaluations is recognised. The acquisition date is the date when the Carlsberg  Group effectively obtains control of an acquired sub- sidiary, enters the management of a joint venture or  obtains significant influence over an associate. The cost of a business combination comprises the  fair value of the consideration agreed upon. When a  business combination agreement provides for an ad- justment to the cost of the combination contingent  on future events, the fair value of that adjustment is  included in the cost of the combination. Goodwill and fair value adjustments in connection  with the acquisition of a foreign entity with a func- tional currency other than the presentation currency  used in the Carlsberg Group are treated as assets  and liabilities belonging to the foreign entity and  translated into the foreign entity’s functional currency  at the exchange rate at the transaction date. If uncertainties regarding measurement of acquired  identifiable assets, liabilities and contingent liabili- ties exist at the acquisition date, initial recognition  will take place on the basis of preliminary fair  values. If identifiable assets, liabilities and contin- gent liabilities are subsequently determined to have  a different fair value at the acquisition date from  that first assumed, goodwill is adjusted up until  12 months after the acquisition. The effect of the  adjustments is recognised in the opening balance  of equity and the comparative figures are restated  accordingly. Changes in estimates of contingent purchase  considerations, except in cases of material error, are  recognised in the income statement under special  items. Changes in estimates of contingent purchase  considerations in business combinations completed  no later than 31 December 2009 are recognised as  an adjustment to goodwill. In a business combination achieved in stages (step  acquisition), the shareholding held immediately be- fore the step acquisition is remeasured at fair value  at the acquisition date. The resulting gain or loss is  recognised in the income statement under special  items. The total fair value of the shareholding held  immediately after the step acquisition is estimated  and recognised as the cost of the total sharehold- ing in the entity. In each business combination, management decides  whether or not to recognise goodwill related to non-  controlling interests. If such goodwill is recognised, it is estimated based on the fair value of the non-  controlling interests less the non-controlling interests’ share of the fair value of acquired assets, liabilities  and contingent liabilities. Consolidated financial statements SECTION 5: ACQUISITIONS AND ASSOCIATES 108 Carlsberg Group Annual Report 2013