Tiscali 2003 Annual Report Download - page 62

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6464
b) Write-downs and write-backs
The value of fixed and intangible assets whose useful life is limited over time is written down respectively through depreciation
and amortisation charges. These fixed and intangible assets, and any other assets, are written down each time a permanent loss
of value is noted; but if the reasons for the loss of value are considered to no longer apply, then the original value is re-establis-
hed. The method for calculating depreciation and amortisation charges is explained separately in these notes.
c) Write-ups
The value of tangible and intangible assets does not include write-ups.
d) Exceptions
No exceptions to the accounting policies set out in the legislation pertaining to consolidated accounting statements have been
made in this, or any other financial year.
e) Accounting entries made solely in application of tax laws
No accounting entries have been made solely in application of tax laws.
f) Intangible assets
“Start-up and expansion costs” are entered under the appropriate accounting entry on the assets side of the balance sheet and
are amortised for a period not exceeding five years starting from the financial year in which the costs were incurred.
“Research, development and advertising costs” are posted under the appropriate line item under “assets” and amortised over a
five-year period starting from the financial year in which they were incurred, since such costs may generate profits over a number
of years. Costs incurred in 2003 relating to specific advertising campaigns for the launch of new broadband products and servi-
ces are posted under the appropriate line under “assets” and amortised using the straight-line method over a two-year period star-
ting from the financial year in which they were incurred, since such costs may generate profits over a number of years.
“Industrial property rights and intellectual property rights” are recorded at their acquisition cost and amortised using the straight-
line method in accordance with the period of use established by the agreement. Under no circumstances shall the amortisation
period exceed five years from the financial year in which the costs were incurred.
“Concessions, licences, trademarks and similar rights” are recorded at their acquisition cost and are amortised over five years.
For contracts lasting over five years, mainly relating to the purchase of IRUs (indefeasible right of use) for networks and/or fibre
optics, depreciation is calculated using the straight-line method, either over the remaining life of the agreement or the estimated
residual life of the right, whichever is the shorter.
“Other intangible assets” are recorded at their purchase or internal production cost, including any additional charges, and amor-
tised in fixed amounts.
“Goodwill” is recorded only if acquired for a substantial amount, within the limits of the costs incurred, and amortised over a
period not exceeding the duration of the asset’s use. Where this cannot be estimated, goodwill on such assets shall be amorti-
sed over a period not exceeding five years.
Maintenance and upgrade costs on third-party assets are included under “other intangible assets" and amortised using the
straight-line method over either the estimated useful life of the asset or the remaining term of the lease, whichever is the shor-
ter.