13.1 Intangible assets: breakdown by asset type

Assets/amounts

31.12.2010

31.12.2009

Finite life

Indefinite life

Finite life

Indefinite life

A.1 Goodwill:

X

868

X

826

A.1.1 Attributable to owners of the parent company

X

868

X

826

A.1.2 Non-controlling interests

X

 

X

 

A.2 Other intangible assets

2,818

-

3,090

-

A.2.1 Assets measured at cost:

2,818

-

3,090

-

a)Internally generated intangible assets

 

 

 

 

b)Other assets

2,818

 

3,090

 

A.2.2 Assets measured at fair value:

-

-

-

-

a)Internally generated intangible assets

 

 

 

 

b)Other assets

 

 

 

 

Total

2,818

868

3,090

826

Goodwill, equal to 868 thousand Euro, comes from the line-by-line consolidation process of the subsidiary, IFIS Finance Sp. Z o.o.

For the aforementioned goodwill, an impairment test was carried out on the adequacy of the entry pursuant to IAS 36. For the purposes of this test, goodwill was allocated to the cash-flow generating unit which corresponds to IFIS Finance taken as a whole, since this represents an autonomous business segment which cannot be broken down further. The valuation was achieved by applying the value in use method based on the projection of expected cash flows for an explicit period of 5 years, discounted based on the estimated cost of the company’s capital calculated using the Capital Asset Pricing Model. Expected cash flows derive from the 2010-2012 business plan approved by the Board of Directors’ Meeting of 4 March 2010 and financial projections made based on the subsidiary’s average growth trends. The terminal value was calculated assuming that the last net cash flow in the specific planning period is replicable. The impairment test did not reveal any impairment losses to be taken to the income statement.

Lastly, a sensitivity analysis regarding the cost of capital was carried out, employing a variation range equal to 5%: the test carried out with the control method also confirmed the reliability of the value recognised.

The change in the value of goodwill compared to the previous year is attributable to the impact of exchange rates changes at the end of the year.

Other intangible assets at 31 December 2010 refer to software purchase and development for 2,388 thousand Euro, amortised on a straight line basis over their estimated useful life, which is 5 years from their entry into use.

Intangible assets also include 430 thousand Euro of residual value of the costs incurred for organising the 5-year revolving securitisation transaction, as described in more detail later. The future benefits of this transaction will arise from the bank’s possibility to avail itself of financial resources at lower costs than those obtainable on the interbank market.

13.2 Intangible assets: annual changes

 

Goodwill

Other internally generated intangible assets

Other intangible assets

31.12.2010

 

FINITE

INDEF

FINITE

INDEF

A. Opening balance

826

-

-

3,090

-

3,916

A.1 Total impairment losses

-

-

-

-

-

-

A.2 Net opening balance

826

-

-

3,090

-

3,916

B. Increases

42

-

-

905

-

947

B.1 Purchases

-

-

-

905

-

905

B.2 Increases in internally generated intangible assets

X

-

-

-

-

-

B.3 Reversals of impairment losses

X

-

-

-

-

-

B.4 Fair value gains:

 

-

-

-

-

-

- Equity

X

 

 

 

 

-

- Income statement

X

 

 

 

 

-

B.5 Exchange gains

42

-

-

-

-

42

B.6 Other increases

-

-

-

-

-

-

C. Reductions

-

-

-

(1,177)

-

(1,177)

C.1 Sales

-

-

-

-

-

-

C.2 Impairment losses and amortisation:

-

-

-

(1,153)

-

(1,153)

- Amortisation

X

-

-

(1,153)

-

(1,153)

- Impairment losses

-

-

-

-

-

-

+ Equity

X

 

 

 

 

-

+ Income statement

 

 

 

 

 

-

C.3 Fair value losses

 

-

-

-

-

-

- Equity

X

 

 

 

 

-

- Income statement

X

 

 

 

 

-

C.4 Transfer to non-current assets under disposal

-

-

-

-

-

-

C.5 Exchange losses

-

-

-

 

-

-

C.6 Other reductions

-

-

-

(24)

-

(24)

D. Net closing balance

868

-

-

2,818

-

3,686

D.1 Total net amortisation, impairment losses and reversals of impairment losses

-

 

-

 

-

E. Gross closing balance

868

-

-

2,818

-

3,686

F. Measurement at cost

-

 

 

-

 

-

Key

Finite: a set duration

Indef: indefinite duration

Purchases of 905 thousand Euro refer to investments for the enhancement of IT systems.