iesy Repository GmbH - Irish Stock Exchange

COURTESY TRANSLATION FROM THE GERMAN LANGUAGE
KABELNETZ NRW HoldCo GmbH, COLOGNE
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2005—(CONTINUED)
Goodwill includes the excess purchase price for the shares over the market value of the identifiable assets acquired and
liabilities assumed at the date of the acquisition. Goodwill is amortized using the straight-line method over 15 years.
Property, Plant and Equipment
Property, plant and equipment is stated at acquisition or construction cost less accumulated depreciation.
Construction costs include direct costs and an appropriate share of material and production overheads. Additionally,
costs for general administration incurred during the period of construction have been included.
Depreciation is charged using the straight-line method over the following estimated useful lives:
Fixed assets Useful life
Leasehold improvements and co-utilization rights for cable ducts 10 to 35 years, lease term
Broadband cable network
• Technical equipment 8 to 10 years
• Broadband cable 15 to 20 years
Equipment and fixtures 3 to 23 years
Ordinary depreciation in the year of acquisition is provided using the pro rata method.
Capital Lease
In connection with the acquisition of the broadband cable business in North Rhine-Westphalia, the subsidiary ish KG
entered into a capital lease agreement with Deutsche Telekom AG (“DTAG”) on the right to co-utilize cable ducts that
contain the broadband cable. These assets are stated at the net present value of the minimum lease payments less straight-line
depreciation over the period of the lease agreement (net book value as of the balance sheet date is EUR 334,703k). The
corresponding liability is stated at the net present value of the obligations arising from the lease agreements in each case at
the end of the period.
Financial Assets
Financial assets are stated at acquisition cost unless extraordinary amortization is necessary due to an expected
permanent impairment.
Inventories
Raw materials and supplies are stated at the lower of cost or market.
Trade Accounts Receivables and Other Assets
Trade accounts receivable and other current assets are stated at face values unless any valuation allowances are
necessary. Long term accounts receivables that do not bear any interests are discounted and stated at their net present value.
Prepaid Expenses
Prepaid expenses consider disbursements before the balance sheet date, which are expenses for a certain period of time
after the balance sheet date.
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