REGISTRATION DOCUMENT AND FINANCIAL REPORT - Iliad

20. FINANCIAL INFORMATION CONCERNING THE COMPANY’S ASSETS AND LIABILITIES,
FINANCIAL POSITION AND PROFITS AND LOSSES
20.1 CONSOLIDATED FINANCIAL STATEMENTS FOR 2007, 2006 AND 2005
Earnings per share
The Iliad Group presents basic and diluted earnings per share.
Basic earnings per share are obtained by dividing attributable profit for the period by the weighted average
number of shares outstanding during the period.
Diluted earnings per share are calculated by adjusting the figures for attributable profit for the period and the
weighted average number of shares outstanding, for the impact of all potential dilutive instruments.
Intangible assets
Intangible assets primarily include:
• Development costs capitalized in accordance with IAS 38, which are amortized over the period during which
the Group is expected to consume the related future economic benefits. These costs are incurred in relation
to designing new materials and are recognized as intangible assets when they relate to distinctly separate
projects for which (i) the costs can be clearly identified; (ii) the technical feasibility of successfully
completing the project can be demonstrated; and (iii) it is probable that future economic benefits will be
generated. These conditions are deemed to be met when the six general criteria defined in IAS 38 are
fulfilled.
• Intangible assets acquired in connection with a business combination. These assets are recognized separately
from goodwill when (i) their fair value can be measured reliably; (ii) they are controlled by the Group; and
(iii) they are identifiable, i.e. are separable or arise from contractual or other legal rights. Where these assets
have a finite useful life they are amortized from the date they are made available for use in the same way as
for intangible assets acquired separately, and an impairment loss is recorded if their carrying amount exceeds
their recoverable amount. Intangible assets with indefinite useful lives are not amortized but are
systematically tested for impairment at least once a year and more frequently when there is an indication that
they may be impaired.
• Licenses are amortized over the license period from the date when the related network is technically ready
for the service to be marketed.
• Impairment losses are recorded under net other operating income and expenses, within operating profit in the
income statement.
• Software, which is amortized on a straight-line basis over a period of one to three years.
Property, plant and equipment
Property, plant and equipment are stated at the acquisition cost, including transaction expenses, or at production
cost. Cost includes any expenses directly attributable to bringing the asset to the location and condition necessary
for it to be capable of operating in the manner intended by the Group’s management.
Depreciation is calculated by the straight-line method, based on the following expected useful lives:
• Buildings ............................................. 20 to 30 years
• Technical equipment ................................. 3 to 14 years
• General equipment ................................... 10 years
• Computer equipment ................................. 3 to 5 years
• Office furniture and equipment ....................... 2 to 10 years
• Access fees for co-location facilities used to conduct unbundling operations are depreciated over a ten-year
period.
118 - Iliad – Registration Document 2007