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Intangible Assets (Tables)
 12 Months Ended
Dec. 31, 2018
Statement [LineItems]  
Summary of intangible assets
(1)

Intangible assets as of December 31, 2018 and 2017 are as follows:

 

(In millions of won)       
     December 31, 2018  
     Acquisition
cost		      Accumulated
amortization		     Accumulated
impairment		     Carrying
amount		  

Frequency usage rights

    ￦ 6,210,882        (3,070,904 )      —       3,139,978  

Land usage rights

      65,974        (55,463 )      —       10,511  

Industrial rights

      163,983        (50,640 )      (29,716 )      83,627  

Development costs

      54,941        (44,304 )      (1,647 )      8,990  

Facility usage rights

      155,470        (124,443 )      —       31,027  

Customer relations

      643,421        (18,330 )      —       625,091  

Club memberships(*1)

      114,650        —       (34,175 )      80,475  

Brand

      374,096        —       —       374,096  

Other(*2)

      4,256,377        (3,058,022 )      (38,640 )      1,159,715  
  

 

 

     

 

 

    

 

 

    

 

 

  
   ￦ 12,039,794        (6,422,106 )      (104,178 )      5,513,510  
  

 

 

     

 

 

    

 

 

    

 

 

  

 

(In millions of won)       
     December 31, 2017  
     Acquisition
cost		      Accumulated
amortization		     Accumulated
impairment		     Carrying
amount		  

Frequency usage rights

    ￦ 4,843,955        (2,667,015 )      —       2,176,940  

Land usage rights

      65,841        (50,091 )      —       15,750  

Industrial rights

      166,082        (54,735 )      —       111,347  

Development costs

      140,460        (134,828 )      (1,529 )      4,103  

Facility usage rights

      153,438        (116,987 )      —       36,451  

Customer relations

      20,796        (16,761 )      —       4,035  

Club memberships(*1)

      108,382        —       (34,768 )      73,614  

Other(*2)

      3,911,749        (2,733,485 )      (13,539 )      1,164,725  
  

 

 

     

 

 

    

 

 

    

 

 

  
   ￦ 9,410,703        (5,773,902 )      (49,836 )      3,586,965  
  

 

 

     

 

 

    

 

 

    

 

 

  

 

 

(*1)

Club memberships are classified as intangible assets with indefinite useful life and are not amortized.

 

(*2)

Other intangible assets primarily consist of computer software and usage rights to a research facility which the Group built and donated, and the Group is given rights-to-use for a definite number of years in return.
Details of the changes in intangible assets
(3)

Research and development expenditures recognized as expense for the years ended December 31, 2018, 2017 and 2016 are as follows:

 

(In millions of won)                     
     2018      2017      2016  

Research and development costs expensed as incurred

    ￦ 387,675        395,276        344,787  
Intangible assets other than goodwill [Member]  
Statement [LineItems]  
Details of the changes in intangible assets
(2)

Details of the changes in intangible assets for the years ended December 31, 2018 and 2017 are as follows:

 

(In millions of won)  
    2018  
    Beginning
balance		     Acquisition     Disposal     Transfer     Amortization     Impair
ment(*1)		     Business
combina
tions(*2)		     Ending
balance		  

Frequency usage rights

   ￦ 2,176,940       1,366,926       —       —       (403,888 )      —       —       3,139,978  

Land usage rights

     15,750       2,918       (1,142 )      406       (7,421 )      —       —       10,511  

Industrial rights

     111,347       6,694       (1,598 )      5,254       (7,418 )      (30,748 )      96       83,627  

Development costs

     4,103       4,250       —       (6 )      (1,866 )      (118 )      2,627       8,990  

Facility usage rights

     36,451       2,223       (39 )      101       (7,709 )      —       —       31,027  

Customer relations

     4,035       213       —       149       (9,541 )      —       630,235       625,091  

Club memberships

     73,614       6,719       (2,950 )      (7 )      —       (173 )      3,272       80,475  

Brand

     —       —       —       —       —       —       374,096       374,096  

Other

     1,164,725       126,164       (9,181 )      277,504       (395,072 )      (29,242 )      24,817       1,159,715  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
  ￦ 3,586,965       1,516,107       (14,910 )      283,401       (832,915 )      (60,281 )      1,035,143       5,513,510  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

 

(*1)

The Group recognized the difference between recoverable amount and the carrying amount of intangible assets amounting to ￦60,281 million as impairment loss for the year ended December 31, 2018.

 

(*2)

Includes assets from the Parent Company’s acquisitions of id Quantique SA, Life & Security Holdings Co., Ltd. and SK Infosec Co., Ltd. and ￦374,096 million of brand determined to have indefinite useful lives acquired from the acquisition of Life & Security Holdings is included in other.

 

(In millions of won)  
    2017  
    Beginning
balance		     Acquisition     Disposal     Transfer     Amortization     Impair
ment(*1)		     Business
combina-
tions(*2)		     Others     Ending
balance		  

Frequency usage rights

   ￦ 2,580,828       —       —       —       (403,888 )      —       —       —       2,176,940  

Land usage rights

     20,834       3,689       (972 )      200       (8,001 )      —       —       —       15,750  

Industrial rights

     121,200       2,677       (28 )      (5,635 )      (6,870 )      —       4       (1 )      111,347  

Development costs

     4,871       3,813       (9 )      (793 )      (2,660 )      (1,119 )      —       —       4,103  

Facility usage rights

     41,788       2,805       (36 )      129       (8,235 )      —       —       —       36,451  

Customer relations

     6,652       1,054       —       —       (3,671 )      —       —       —       4,035  

Club memberships

     74,039       5,023       (3,452 )      122       —       (769 )      —       (1,349 )      73,614  

Brand

     —       —       —       —       —       —       —       —       —  

Other

     926,142       127,396       (19,698 )      503,277       (369,546 )      (16,605 )      14,118       (359 )      1,164,725  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
  ￦ 3,776,354       146,457       (24,195 )      497,300       (802,871 )      (18,493 )      14,122       (1,709 )      3,586,965  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

 

(*1)

The Group recognized the difference between recoverable amount and the carrying amount of intangible assets amounting to ￦18,493 million as impairment loss for the year ended December 31, 2017.

 

(*2)

Includes intangible assets acquired as a result of IRIVER LIMITED’s purchase and merge of S.M. LIFE DESIGN COMPANY INC. and SM mobile communications Co., Ltd. during the year ended December 31, 2017.
Frequency usage rights [member]  
Statement [LineItems]  
Summary of intangible assets
(4)

Details of frequency usage rights as of December 31, 2018 are as follows:

 

(In millions of won)  
     Amount     

Description

    Commencement of
amortization		      Completion of
amortization		  

800MHz license

    ￦ 101,969      CDMA and LTE service      Jul. 2011        Jun. 2021  

1.8GHz license

      376,860      LTE service      Sept. 2013        Dec. 2021  

2.6GHz license

      971,350      LTE service      Sept. 2016        Dec. 2026  

2.1GHz license

      322,873      W-CDMA and LTE service      Dec. 2016        Dec. 2021  

3.5GHz license(*)

      1,164,243      5G service      —        Nov. 2028  

28GHz license(*)

      202,683      5G service      —        Nov. 2023  
  

 

 

           
   ￦ 3,139,978           
  

 

 

           

 

 

(*)

The Group participated in the frequency license allocation auction hosted by Ministry of Science and Information and Communication Technology (ICT) and was assigned the 3.5GHz and 28GHz bands of frequency licenses during the year ended December 31, 2018. The considerations payable for the bands of frequency are ￦1,218,500 million and ￦207,300 million, respectively. These bands of frequency were assigned in December 2018 and the annual payments in installment of the remaining balances will be made for the next ten and five years, respectively. The Group recognized these frequency licenses as intangible assets at the date of initial lump sum payment and starts amortization when the bands of frequency are in the condition necessary for them to be capable of operating in the manner intended by management.