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Kabel Deutschland GmbH
Notes to the consolidated financial statements
The Group recognizes subscriber acquisition costs incurred to obtain new subscribers if
the costs are directly attributable to obtaining specific contracts, are incremental, can be
measured reliably and meet the definition and recognition criteria of an intangible asset in
accordance with IAS 38. Subscriber acquisition costs incurred to obtain new contracts without
an initial contract period (“open-ended contracts”) are expensed as incurred.
Following initial recognition, intangible assets are carried at cost less any accumulated
depreciation and any accumulated impairment loss.
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2.6.4 Subsequent Expenses
The cost of significant changes and additions are included in the carrying amount of the
intangible asset if they qualify for recognition as an intangible asset and it is probable that future
economic benefits in excess of the originally assessed standard of performance will be realized
by the Group. Significant additions are depreciated over the remaining useful life of the related
asset.
2.6.5 Amortization of intangible assets
The estimated useful life of customer lists is based on the average number of
terminations and the term of the average contract life of individual end users who generate
significant contribution margins.
The amortization of customer lists and other intangible assets with definite useful lives
is based on the straight-line method over the assets’ estimated useful lives. Amortization begins
when the intangible asset is ready for use.
The Group recognizes subscriber acquisition costs incurred to obtain new subscribers
as part of the intangible assets if relevant preconditions are fulfilled (see 2.6.3). The Group
amortizes these costs over the initial contract period except for contracts where there is reliable
past evidence regarding the expected customer relationship period.
The amortization expense is recognized in the statement of income in the expense
category consistent with the function of the intangible assets.
The useful lives are estimated as follows:
• Customer list
• Subscriber Acquisition Costs
• Software, licenses and other intangible assets
8.5 years
1 to 8.5 years
1 to 10 years
The intangible assets’ residual values, useful lives and depreciation methods are
reviewed, and adjusted if appropriate, at each financial year end.