Annual Report 2010 - CMVM

Notes to the Consolidated Financial Statements as at 31 December 20102.4 – Intangible assetsIntangible assets essentially comprise contractual rights and costs incurred in specific projects with future economic value, and are stated at cost, minus accumulated depreciationand impairment losses. Intangible assets are recognised only if it is probable that they will produce future economic benefits for the Group, are controllable by theGroup and their value can be measured reliably.Internally generated intangible assets, including expenditure on current research and development, are recognised as a cost for the period when they are incurred.Internal costs associated to software maintenance and development are recorded as costs in the income statement when incurred, except in cases where these costs aredirectly related to projects which are likely to generate future economic benefits for the Group. In such cases, these costs are capitalised as intangible assets.Depreciation is calculated, after the beginning of use of the assets, through the straight-line method, in accordance with the year of utility that the Group expects of theassets concerned.2.5 – Tangible fixed assetsTangible assets used in production, services rendered or for administrative use are recorded at acquisition or construction cost, including the expenses incurred with theiracquisition, minus accumulated depreciation and impairment losses, when applicable.Tangible assets are depreciated through the straight-line method, according to their estimated useful life, from the date on which they are available to be used for the intendedpurpose and cease when the assets become classified as non-current assets held for sale. Depreciation is calculated in accordance with the following estimated useful lives:Years ofuseful lifeBuildings 5 - 20Basic equipment 4 - 8Transport equipment 3 - 7Tools and utensils 3 - 7Administrative equipment 2 - 10Other tangible fixed assets 1 - 4Improvements and ameliorations are only recognised as assets when they correspond to the replacement of goods, which are written-off, or lead to an increase in futureeconomic benefits.Tangible fixed assets in progress correspond to tangible assets under construction and are recorded at acquisition cost minus any impairment losses. These tangible fixedassets are depreciated as from the time when the underlying assets are able to be used for the intended purposes.Capital gains or losses arising from the sale or write-off of tangible fixed assets are determined by the difference between the sales price and the net book value on the dateof sale/write-off and stated at their net worth in the income statement under "Other operating income” or "Other operating costs", as applicable.2.6 - LeasesLease contracts are classified as: (i) finance leases, if all the risks and benefits of their ownership are transferred substantially; or (ii) operating leases, if all the risks and benefitsof ownership are not transferred substantially.Leases are classified as finance or operating leases according to the nature of the contract and not its form.Assets acquired under finance lease contracts, as well as the corresponding liabilities, are recorded through the financial method, recognising the asset, the corresponding accumulateddepreciation and the outstanding debts payable pursuant to the contractual financial plan. Furthermore, the interest included in the lease instalments and depreciation /amortisation of the assets are recognised as costs in the income statement of the period to which they refer.155