Tiscali 2009 Annual Report Download - page 114

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and other intangible assets. On the whole, the increase in this item amounts to EUR 7.9 million, mainly for
licenses and software and the creation of new IRU contracts.
The item “Broadband service activation costs”, equalling EUR 9.3 million, relates to the capitalization of
the activation costs ADSL service. The balance of this category reflects the positive impact of changes
in accounting estimates related to treatment of customer acquisition costs described in the section
“Assumptions for the application of accounting standards - Activation costs and customer acquisition
costs”. The effect of this change in the accounting estimate amounts to EUR 2.8 million.
Overall investments in this category amount to EUR 9.8 million made by Tiscali Italia S.p.A., mainly for
licenses and software and the creation of new IRU contracts.
The other intangible assets, amounting to EUR 14.3 million, mainly consist of development costs for the
new UNIT2 platform for EUR 11.8 million, and about EUR 2 million for costs relating to the mobile project
(MVNO). The increases in this item, for EUR 8 million, include costs incurred for improving management of
the UNIT2 platform used for managing the customer base.
The item Intangible assets in course of acquisition and prepayments, amounting to EUR 6.9 million, held
by the Italian subsidiary Tiscali Italia S.p.A., refers to costs for fibre activation together with activities for site
placement and installation.
The main reclassifications between the categories under intangible assets of the subsidiary Tiscali Italia
S.p.A. are the following:
• from the category “Other intangible assets in course of acquisition and prepayments” to “Concessions
and similar rights” for EUR 4.4 million for fibre optics costs in IRU mode entering in service;
• from the category “Other intangible assets in course of acquisition and prepayments” to “Broadband
service activation costs” for EUR 220 thousand for ADSL line and device activation for customers
subscribing during the year;
• from the category “Other intangible assets in course of acquisition and prepayments” to “Other
intangible assets” for EUR 2 million for MVNO set-up costs, started up during the year;
Other reclassifications between intangible and tangible assets include the following:
• from the category “Other assets in course of acquisition and prepayments” (intangible assets) to “Plant
and machinery” (tangible assets) for EUR 488 thousand for ULL site installation and expansion during
the year;
• from the category “Other tangible assets in course of construction and prepayments” (tangible assets) to
“Broadband service activation costs” (intangible assets) for EUR 1.6 million for modems for customers
subscribing during the year;
• from the category “Other assets in course of construction and prepayments” (tangible assets) to
“Concessions and similar rights” (tangible assets) for EUR 24 thousand for software made available
during the year.
The item “Other variations”, amounting to EUR 1.1 million, includes discounting IRU contracts deriving
from the determination of contract fair value and Indefeasible right of use contracts (IRU) in the stage of
initial measurement.
Consolidated Financial Statements and Explanatory Notes