a) Change in intangible assets and goodwill by class
| R$ thousand | ||||||
| Goodwill | Intangible Assets | |||||
| Acquisition of financial service rights (1) | Software (1) | Customer portfolio (1) | Other (1) | Total | ||
| Balance on December 31, 2016 | 4,945,313 | 2,503,457 | 3,945,244 | 4,358,923 | 44,589 | 15,797,526 |
| Additions/(reductions) | - | 2,549,335 | 1,203,313 | - | (8,944) | 3,743,704 |
| Impairment (3) | - | - | (30,683) | - | - | (30,683) |
| Amortization | - | (1,000,894) | (1,327,456) | (1,000,234) | (2,656) | (3,331,240) |
| Balance on December 31, 2017 | 4,945,313 | 4,051,898 | 3,790,418 | 3,358,689 | 32,989 | 16,179,307 |
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| Balance on December 31, 2015 | 723,526 | 2,260,033 | 3,639,825 | 709,463 | 76,788 | 7,409,635 |
| Balance originating from an acquired institution (2) | 4,221,787 | 264,349 | 288,826 | 3,993,743 | 4,840 | 8,773,545 |
| Additions/(reductions) | - | 930,190 | 1,284,041 | - | 129,266 | 2,343,497 |
| Impairment (3) | - | - | (212,374) | - | - | (212,374) |
| Amortization | - | (951,115) | (1,055,074) | (344,283) | (166,305) | (2,516,777) |
| Balance on December 31, 2016 | 4,945,313 | 2,503,457 | 3,945,244 | 4,358,923 | 44,589 | 15,797,526 |
(1) Rate of amortization: acquisition of banking rights - in accordance with contract agreement; software - 20%; Customer portfolio - up to 20%; and others - 20%;
(2) HSBC Brasil; and
(3) Impairment losses were recognized in the consolidated statement of income, within “Other operating income/(expenses)”.
| R$ thousand | ||
| On December 31 | ||
| 2017 | 2016 | |
| Banking | 4,651,347 | 4,651,347 |
| Insurance, pension and capitalization bonds | 293,966 | 293,966 |
| Total | 4,945,313 | 4,945,313 |
The Cash Generation Units allocated to the banking segment and the insurance, pension and capitalization bonds segment are tested annually for impairment of goodwill. We did not incur any goodwill impairment losses in 2017,2016 and 2015.
The recoverable amount from the Banking Segment has been determined based on a value-in-use calculation. The calculation uses cash-flow predictions based on financial budgets approved by management, with a terminal growth rate of 7.1% p.a. (7.6% p.a. in 2016). The forecast cash flows have been discounted at a rate of 13.6% p.a. (12.9% p.a. in 2016).
The key assumptions described above may change as economic and market conditions change. The Organization estimates that reasonably possible changes in these assumptions within the current economic environment are not expected to cause the recoverable amount of either unit to decline below the carrying amount.