Tiscali 2008 Annual Report Download - page 82

Intangible assets (note 15)
Changes in intangible asset for 2008 were as follows:
The item “Computers, software and development costs”, whose
balance amounts to EUR 2.4 million, includes the capitalisation
of development costs for applications software customized for
the exclusive use of the company. These costs are mainly costs
for dedicated internal staff.
The balance of “Concessions and similar rights”, amounting to
EUR 84.8 million, includes about EUR 43.5 million relating to
rights and costs connected with the acquisition of transmission
capacity on a long-term basis, in the shape of concession
agreements for the use of the same (IRU -Indefeasible Rights of
Use), and around EUR 40 million relating to licences and software.
On the whole, the increase in this item, amounting to EUR
14.4 million, mainly reflected the creation of new IRU contracts,
in relation to the investments made for the development of the
unbundling network.
The item Broadband service activation costs, totalling EUR
33.7 million, relates to the capitalisation of the activation costs
for the ADSL service. Such costs are amortised in relation to
the minimum duration of the contracts with customers, currently
equating to twelve months.
Total increases in this category amounting to EUR 76.4 million,
include EUR 10.5 million relating to the Italian subsidiary and
EUR 65.9 million relating to the UK subsidiaries.
Other fixed assets , amounting to EUR 71 million include EUR
23.3 million in intangible assets of the Italian subsidiary, including
costs for the development of the new UNIT2 platform for EUR
19 million, EUR 4.4 million in intangible assets of Tiscali Uk Ltd
(IPTV contents, technology, relationship custody), and EUR 43.1
million in intangible assets relating to the Pipex’s broadband and
voice division, concerning the development of the customer
database and the competition restriction agreements respectively
for EUR 41.1 million and around EUR 2 million.
The increases in this item, EUR 22 million, are essentially
attributable to the Italian subsidiary and include improvements
in the management of the customer database (UNIT2), and to
technical equipment for the expansion of internal networks
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CONSOLIDATED FINANCIAL STATEMENTS AND EXPLANATORY NOTES
Intangible assets Computers Concessions Broadband Other Total
EUR (000) software and and similar service
development rights activation
costs costs
HISTORIC COST
1 January 2008 11,888 221,155 82,251 109,006 424,300
Increases 245 14,418 76,368 21,964 112,994
Decreases (896) - (7,479) - (8,375)
Assets destined to be disposed of (135) (50,789) - (353) (51,277)
Revaluations/Writedowns - (6,083) (238) (10,720) (17,042)
Reclassifications (266) 1,578 (3,141) (1,277) (3,106)
Exchange differences (1,528) (31,346) (23,876) (20,425) (77,174)
Other (896) - - - -
31 December 2008 9,308 148,933 123,884 98,194 380,319
ACCUMULATED AMORTISATION
1 January 2008 6,014 76,549 53,098 2,596 138,258
Increases in amortisation 3,127 21,481 54,512 35,475 114,595
Decreases - (1,951) (6,694) - (8,645)
Assets destined to be disposed of (46) (21,686) - (239) (21,971)
Revaluations/Writedowns - - - (1,411) (1,411)
Reclassifications (86) 856 (1,056) (853) (1,139)
Exchange differences (2,068) (11,175) (9,714) (8,342) (31,298)
Other --- --
31 December 2008 6,941 64,074 90,147 27,226 188,388
NET VALUE
31 December 2007 5,874 144,606 29,153 106,409 286,042
31 December 2008 2,366 84,859 33,737 70,969 191,931