Annual report 2012

13. Intangible assets (IA)

Goodwill and other intangible assets

As at 31 December 2012, the carrying amount of goodwill is recorded at EUR 2,451 thousand (2011: EUR 2,451 thousand), whereas the carrying amount of other intangible assets which resulted from final allocation of purchase cost of individual companies amounted to EUR 1,337 thousand.

Goodwill was assessed by the Group in 2012 as required under the applicable standards. The Group assessed the recoverable amount of the cash generating unit as at 31 December 2012, which was accounted for as value in use based on the future cash flow method, discounted to the present value and following assumptions:

  • g – nominal growth in cash flows over the residual period, taking account an inflation rate of 2%.
  • a WACC (weighted average cost of capital) of 11.4%,
  • planned cash flows for the period 2013 -2017 of the cash generating unit, and
  • a calculation of value over the residual period based on the normalisation of long-term operations.


Licences

Licences comprise licences for the use of the radio frequency spectrum GSM 900 and 1800, and UMTS mobile telephony in the territory of the Republic of Slovenia, a GSM licence in Kosovo, and GSM 900 and UMTS licences in Macedonia, in the amount of EUR 94,971 thousand. Other licences refer to software.

As at 31 December 2012, the carrying amount of licences obtained in Slovenia for UMTS amounted to EUR 36,159 thousand (2011: EUR 40,300 thousand) and EUR 1,327 thousand for GSM (2011: EUR 2,263 thousand). As for Kosovo, the carrying amount of GSM licences amounted to EUR 43,553 thousand (2011: EUR 47,937 thousand) as at the reporting date. The carrying amount of UMTS licences for Macedonia amounted to EUR 3,824 thousand (2011: EUR 1,374 thousand), and to EUR 10,108 thousand for GSM licences (2011: EUR 13,471 thousand).

Group companies have no limited property rights on intangible assets, which are free of encumbrances.

Significant additions to intangible assets in 2012 relate primarily to the acquisition of software applications (EUR 7,057 thousand) and licenses (EUR 1,098 thousand).


Movement in intangible assets in 2012

1 Other transfers comprise transfers between intangible assets and property, plant and equipment, transfers between groups of assets and transfers from inventories.
EUR thousand Goodwill Licences Software Other IA IA under construction Total
Cost            
Balance at 1 Jan 2012 107,922 258,519 134,428 36,257 10,126 547,252
Translation to the presentation currency 0 280 93 46 0 419
Additions 0 372 1,576 628 25,173 27,749
Transfer to use 0 1,098 7,057 3 -8,158 0
Disposal 0 -1,169 -12,736 -2,184 0 -16,089
Other transfers 1 0 3,986 1,955 -2,312 0 3,629
Balance at 31 Dec 2012 107,922 263,086 132,373 32,438 27,141 562,960
Accumulated amortisation            
Balance at 1 Jan 2012 105,471 146,704 109,542 27,850 267 389,834
Translation to the presentation currency 0 70 148 18 0 236
Impairment 0 0 142 0 0 142
Disposal 0 -1,169 -12,731 -422 0 -14,322
Other transfers 1 0 3,667 1,827 -476 0 5,018
Other transfers1 0 14,098 17,441 1,558 0 33,097
Balance at 31 Dec 2012 105,471 163,370 116,369 28,528 267 414,005
CARRYING AMOUNT            
Balance at 1 Jan 2012 2,451 111,815 24,886 8,407 9,859 157,418
Balance at 31 Dec 2012 2,451 99,716 16,004 3,910 26,874 148,955


Movement in intangible assets in 2011

1 Other transfers comprise transfers between intangible assets and property, plant and equipment, transfers between groups of assets and transfers from inventories.
Movement in intangible assets in 2011 Goodwill Licences Software Other IA IA under construction Total
Cost            
Balance at 1 Jan 2011 108,853 258,878 131,580 32,426 11,748 543,485
Translation to the presentation currency 1 -682 -25 -59 0 -765
Additions 0 21 1,832 217 14,771 16,841
Transfer to use 0 783 6,832 8,373 -15,988 0
Disposal -932 -481 -5,791 -4,700 -405 -12,309
Other transfers 1 0 0 0 0 0 0
Balance at 31 Dec 2011 107,922 258,519 134,428 36,257 10,126 547,252
Accumulated amortisation            
Balance at 1 Jan 2011 105,471 151,010 95,727 27,776 634 380,618
Translation to the presentation currency 0 -238 -149 -94 0 -481
Impairment 0 0 0 0 38 38
Disposal 0 -474 -5,660 0 -405 -6,539
Other transfers 1 0 -17,721 -1,009 -831 0 -19,561
Amortisation 0 14,127 20,633 999 0 35,759
Balance at 31 Dec 2011 105,471 146,704 109,542 27,850 267 389,834
CARRYING AMOUNT            
Balance at 1 Jan 2011 3,382 107,868 35,853 4,650 11,114 162,867
Balance at 31 Dec 2011 2,451 111,815 24,886 8,407 9,859 157,418