Amadeus IT Holding, S.A. and Subsidiaries - Investor relations at ...

AMADEUS IT HOLDING, S.A. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS FOR THE YEARS ENDED
DECEMBER 31, 2011, AND 2010
(EXPRESSED IN THOUSANDS OF EUROS - KEUR)
performed annually or whenever there are signs that suggest impairment. For
the finite useful life of assets the amortization period will range between 3 to
10 years, the straight line method being the method applied for charging
expense to the statement of comprehensive income within the “Depreciation
and amortization” caption.
� Technology and Content – This caption includes the costs net of accumulated
amortization of acquiring technology and content by means of acquisitions
through business combinations, through separate acquisitions, or internally
generated. These assets are the combination of software elements and travel
content, the latter being obtained by Amadeus through its relationships with
travel providers. This combination allows the processing of travel transactions
(bookings) between supply (travel providers) and demand (travel agencies),
and it makes the travel information available to users through the Amadeus
System. It also includes the development technology of the IT solutions.
Internally generated Technology and Content includes software applications
developed by the Group. These costs are recognized as an asset once
technical feasibility is established, it is reasonably anticipated that the costs
will be recovered through future activities or benefit in future periods, and the
cost of the assets can be measured reliably (see paragraph t).
When the Group receives cash from customers to be used only to develop
assets which the Group must then use to provide the customer with ongoing
access to certain services, and if the Group determines that it controls the
asset developed, the resulting asset is recognized as “Technology and
Content” in the statement of financial position at cost.
These assets are amortized by applying the straight-line method over an
estimated useful life from 3 to 20 years, and within this category, those assets
that were acquired through business combinations, are amortized using a
straight-line method over an estimated useful life between 15 and 20 years;
those associated to Amadeus IT technology are amortized in 20 years as the
IT Industry model is for a very long period, and for the main components of
the GDS technology the useful life estimated is 15 years due to the status of
Amadeus reservation system and the technological gap perceived by the
company over competitors. The customization of the software developed for
certain airlines is amortized over an estimate useful life between 3 to 13
years.
� Contractual relationships – This includes the costs net of accumulated
amortization of contractual relationships with Travel Agencies, Users and with
travel providers, as acquired through business combinations, as well as
capitalizable costs, related to travel agency incentives, that can be
recognized as an asset. These latter assets relate mainly to upfront payments
made with the objective of increasing the number of clients, or to improve the
customer loyalty of the customer portfolio. They are instrumented through
agreements with a term that is always over a year, in which the customer
commits to achieve certain economic objectives. The agreements include
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