Page 106 - ENAV eng_Relazione_Finanziaria_Annuale_2014

104 ENAV – 2014 Financial Statements

Patents and intellectual property rights increased by ¤16,405 thousand
due to the acquisition of new assets during the year, such as licenses for
the use of management and operating systems and the installation of
application software, of which the main items relate to Oracle licenses,
new ESPER personnel management system modules, new Autocad back-
up software and licenses for meteo and radio-navigation programs.

Intangible assets under formation amount to ¤41,542 thousand,
representing an increase of ¤7,319 thousand over the year, and mostly
relate to the following investment projects: i)the NOAS (New Operational
Area System) programregarding the optimization of systems already
developed by the parent company with the Airnas and Athena programs
aimed at maintaining Single European Sky certification and the integration
of the Ais and Meteo data banks; ii) the new SAPERE airborne control
planning and management system.

The net decrease over the year of ¤13,849 thousandrelates for ¤16,405
thousand to projects completed and entering service during the year
which are classified under the item to which they relate, ¤3,062 thousand
to a reclassification to this item of projects initially classified as tangible
assets and ¤747 thousand expensed during the year as the items do not
qualify for classification as intangible assets.

Amortization of ¤16,884 thousand was charged during the year (¤13,834
thousand in the year ended 31 December 2013).

Goodwill consists of the higher price paid to acquire the subsidiary Techno
Sky Srl over the fair value of its net assets, representing future economic
benefits. This balance, amounting in total to ¤66,486 thousand, has
been allocated to the Maintenance Services CGU which coincides with
the legal entity Techno Sky Srl. In accordance with IAS 36 Impairment of
Assetsgoodwill was impairment tested at 31 December 2014 by comparing
the value in use of the CGU with the carrying amount of the net assets of that
unit, again as required by IAS 36. The recoverable amount was determined
on the basis of fair value less costs to sell, calculated on the basis of the
cash flows set out in the latest business plan of the subsidiary Techno Sky
prepared for 2014-2019. There was no change in the valuation technique
compared to the previous year. The assumptions used to determine the
recoverable amount were a growth rate of 1% for operating cash flows,
consistent with the reference macroeconomic data growth rate, and an
EBITDA margin of 20% of revenues for the last year of the period. This test
led to the determination of a recoverable amount exceeding the carrying
value, and accordingly no impairment loss was recognized.

A WACC (Weighted Average Cost of Capital) of 7.2% was used as the
discount rate. Assuming an increase of 1% in WACCfor the sensitivity
analysis and keeping a growth rate of 1% the recoverable amount continued
to exceed the carrying amount of the net assets relating to the CGU.

No other likely changes in the key impairment parameters were noted that
might take value in use below the carrying amount of the CGU’s assets.