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OAO Severstal and subsidiariesOAO Severstal and subsidiariesNotes to the consolidated financial statementsfor the years ended December 31, 2008, 2007 and 2006(Amounts expressed in thousands of US dollars, except as stated otherwise)Notes to the consolidated financial statementsfor the years ended December 31, 2008, 2007 and 2006(Amounts expressed in thousands of US dollars, except as stated otherwise)23. Intangible assetsDepreciation and impairment:Land andbuildingsPlant andmachineryOther productiveassetsCommunity andinfrastructureassetsOther productive assets include transmission equipment, transportation equipment and tools.Construction-inprogressTotal assetsDecember 31, 2005 249,132 1,289,074 89,448 41,397 97,859 1,766,910Reclassifications (3,640) 5,515 (1,678) (197) - -Depreciation expense 113,087 449,635 29,737 3,465 - 595,924Business combinations 1,634 91 277 3 - 2,005Disposals (3,741) (169,420) (14,356) (561) (11,056) (199,134)Business de-combinations - - - (374) - (374)Transfers 7,952 2,165 3 5,003 (15,123) -Impairment of assets 10,454 33,253 1,824 2,605 9,684 57,820Foreign exchange difference 27,286 131,221 8,887 4,189 6,844 178,427December 31, 2006 402,164 1,741,534 114,142 55,530 88,208 2,401,578Reclassifications 1,583 (4,650) 565 2,502 - -Depreciation expense 143,124 652,555 34,132 6,341 - 836,152Business combinations 1,938 7,191 803 8 - 9,940Disposals (2,689) (147,110) (9,280) (1,309) (1,186) (161,574)Business de-combinations (6,806) (51,376) (1,312) (1,869) (69) (61,432)Reclassified to assets held forsale (22,223) (63,321) (5,190) (17) (6,043) (96,794)Transfers 3,215 304 58 4,956 (8,533) -Impairment of assets 2,112 15,012 (36) 2,441 9,366 28,895Foreign exchange difference 40,517 167,105 11,081 4,751 7,855 231,309December 31, 2007 562,935 2,317,244 144,963 73,334 89,598 3,188,074Reclassifications 8,416 (20,894) 10,161 2,317 - -Depreciation expense 162,789 806,565 62,199 4,293 - 1,035,846Disposals (21) (95,642) (5,867) (570) (15,997) (118,097)Business de-combinations (1,497) (1,768) (341) (435) - (4,041)Reclassified to assets held forsale - (1,096) (9) - - (1,105)T ransfers - (10) (1) 1,941 (1,930) -Impairment of assets 146,625 876,020 11,914 3,702 40,863 1,079,124Foreign exchange difference (110,062) (389,964) (28,068) (13,711) (11,548) (553,353)December 31, 2008 769,185 3,490,455 194,951 70,871 100,986 4,626,448Net book values:December 31, 2006 1,735,210 3,943,238 153,477 26,475 1,112,465 6,970,865December 31, 2007 1,936,945 5,168,206 205,699 36,077 942,189 8,289,116December 31, 2008 2,027,421 5,946,470 269,978 32,940 1,591,496 9,868,305Cost:GoodwillMineralrightsSoftwareEvaluation, explorationanddevelopmentexpenditure*Other intangibleassetsDecember 31, 2005 1,438 29,220 27,998 - 6,327 64,983Additions - 4,717 1,473 - 2,618 8,808Disposal - - - - (337) (337)Foreign exchange difference 2 2,948 3,033 - 689 6,672December 31, 2006 1,440 36,885 32,504 - 9,297 80,126Additions - 916 13,927 11,202 5,391 31,436Business combinations 150,702 245,653 - 156,582 72,274 625,211Disposals - - (6,161) - (966) (7,127)Reclassified to assets heldfor sale - (34,254) - - - (34,254)Business de-combinations - - (6,224) - (4,728) (10,952)Foreign exchange difference 4,804 3,280 2,701 1,137 3,157 15,079December 31, 2007 156,946 252,480 36,747 168,921 84,425 699,519Additions - 2,246 28,058 33,650 28,238 92,192Business combinations 569,512 479,694 604 113,853 113,617 1,277,280Disposals - (289) (1,014) (121) (13,270) (14,694)Business de-combinations (3,621) - - - - (3,621)Foreign exchange difference (20,747) (11,038) (1,580) (30,502) (12,784) (76,651)December 31, 2008 702,090 723,093 62,815 285,801 200,226 1,974,025Amortization and impairment:December 31, 2005 20 - 4,558 - 3,882 8,460Amortization expense - 1,708 5,045 - 2,240 8,993Disposals - - - - (249) (249)Foreign exchange difference 2 55 823 - 376 1,256December 31, 2006 22 1,763 10,426 - 6,249 18,460Amortization expense - 3,046 3,756 - 3,308 10,110Disposals - - (6,161) - (396) (6,557)Reclassified to assets heldfor sale - (3,602) - - - (3,602)Business de-combinations - - (3,924) - (3,923) (7,847)Foreign exchange difference 2 215 844 - 827 1,888December 31, 2007 24 1,422 4,941 - 6,065 12,452Amortization expense - 28,597 5,905 - 15,432 49,934Impairment 461,139 - - - - 461,139Disposals - (172) (367) - (981) (1,520)Foreign exchange difference (4) (1,174) (489) - (799) (2,466)December 31, 2008 461,159 28,673 9,990 - 19,717 519,539Net book values:December 31, 2006 1,418 35,122 22,078 - 3,048 61,666December 31, 2007 156,922 251,058 31,806 168,921 78,360 687,067December 31, 2008 240,931 694,420 52,825 285,801 180,509 1,454,486Total144*At December 31, 2008 of the above amounts US$ 39.7 million (December 31, 2007: nil; December 31, 2006: nil) are licensesin development stage.145