Tiscali 1999 Annual Report Download - page 18

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e) INTANGIBLE ASSETS
Start-up and expansion costs, which are fully discussed below in the analysis of balance sheet items, are
disclosed separately. They are entered in the designated line item in the assets side and are amortized for a
period not exceeding 5 years starting from the financial year in which said costs were incurred.
Research, development and advertising costs are shown in the designated line item on the assets side and
are amortized for a period of three years starting from the financial year in which they were incurred, since
said costs produce profits over a number of years.
Licenses, trademarks and patent rights are recorded at their acquisition cost in line items “industrial patent
rights” and “rights to intellectual property”, and amortized in accordance with the period of use as
established by the contract. At all events, the amortization period will not exceed 5 years from the financial
year in which they were incurred.
The balance sheet contains no value relative to goodwill.
Maintenance and upgrading costs on fixed assets belonging to third parties are shown at line item “other”
and are systematically amortized for a shorter period between the future profitability of expenses incurred
and the residual contract period.
f) FIXED ASSETS AND DEPRECIATION
Fixed assets are recorded at purchase or production cost, including any ancillary charges.
Depreciation is calculated with reference to cost, in a manner which is consistent with the possibility of
residual use.
The posting in the balance sheet of capital equipment leasing operations performed in the financial year
reflects the interpretation of current legislation, i.e. the posting of leasing fees is made based on the
reference period for each payment.
Ordinary maintenance expenses are wholly debited to the profit and loss statement. Maintenance expenses
of an incremental nature are attributed to the asset to which they refer and are depreciated based on the
possibility of residual use of the selfsame asset.