Tiscali 2007 Annual Report Download - page 89

19. Intangible assets
Intangible asset movements for the year were as follows:
The item “Computers, software and development costs”, whose bal-
ance amounts to EUR 5.9 million, includes the capitalization of devel-
opment costs of applicative software acquired for an unspecified
time and personalized for the exclusive use of the company. Such
costs mainly relate to the costs from internal staff devoted to it.
The balance of “Concessions and similar rights”, amounting to EUR
144.6 million, includes about EUR 81.3 million relating to rights and
costs connected with the acquiring of conveying ability, on a sever-
al-year basis, in the shape of concession contracts for the use of the
same (IRU/Indefeasible Rights of Use). Furthermore, that balance
includes EUR 27.2 million of Pipex intangible assets, EUR 20 mil-
lion of which originating from the allocation of the fair value calcu-
lated for the acquisition, and EUR 6.4 million existing at the date of
the acquisition.
On the whole, the increase in such item, amounting to EUR 17.9
million, mainly depended (EUR 12.6 million) on the opening of new
IRU contracts, in relation to the investments made for the develop-
ment of the unbundling network.
The item “Broadband service activation costs”, equalling EUR 29.1
million, relates to the capitalization of the activation costs concern-
ing the ADSL service. Such costs are amortised in relation to the
minimum duration of the contracts with customers, currently amount-
ing to twelve months. The item balance includes EUR 3.9 million
relating to Pipex’s broadband activation costs.
The decreases relating to this item are attributable to the writeback
of the capitalizations of the activation costs relating to those cus-
tomers whose contracts were normally cancelled, depending on the
normal churn rate of the customer database.
The “other” fixed assets include EUR 79.5 million of Pipex intangi-
ble assets originating from the allocation of the fair value calculated
for the acquisition. In particular, it is the valorization of the customer
database and of the non-competition agreements, for EUR 72.2 mil-
lion and EUR 7.3 million, respectively.
Moreover, the balance includes the intangible assets of Video Net-
work Ltd recorded with fair value (contents, technology, customer
relationships), amounting to EUR 9.4 million, as well as software devel-
CONSOLIDATED FINANCIAL STATEMENTS AND EXPLANATORY NOTES AT 31 DECEMBER 2007
88
Intangible assets Computers, Concessions Broadband Other Total
software and and similar rights service
EUR (000) development costs activation costs
Historic cost
1.01.2007 54,211 150,941 61,536 48,704 315,392
Increases 3,159 17,875 49,991 19,157 90,183
Decreases (452) (19,541) (38,243) (15) (58,251)
Acquisitions/changes in consolidation area - 33,867 198 79,550 113,615
Revaluations/writedowns ----
-
Reclassifications (44,726) 42,478 13,214 (37,473) (26,507)
Exchange differences (304) (4,467) 4,445 917 (10,133)
Other -----
31.12.2007 11,888 221,155 82,251 109,006 424,300
EUR (000)
Accumulated amortisation
1.01.2007 4,219 54,303 35,149 3,350 97,021
Increases in amortisation 3,634 29,872 50,309 20,552 104,367
Decreases (111) (19,542) (35,649) - (55,302)
Acquisitions/changes in consolidation area - 6,571 7,132 - 13,703
Revaluations/Writedowns ----
-
Reclassifications (1,093) 2,360 (2,229) (1,747) (2,710)
Exchange differences (635) 2,985 (1,614) (19,559) (18,823)
Other -----
31.12.2007 6,014 76,549 53,098 2,596 138,258
EUR (000)
Valore netto
31.12.2006 49,992 96,638 26,387 45,354 218,371
31.12.2007 5,874 144,606 29,153 106,409 286,042