Page 67 - Annual Report 2015 EN
P. 67
Annual Report 2015
2.4 Intangible assets
2.4.1 Service concession arrangement
The Service Concession Arrangement refers to the Airport Development Agreement (“ADA”) which
governs the right that has been granted by the Greek State to the Company for the purpose of the
finance, construction, operation and development of the Athens International Airport. The above
right has a finite useful life of approximately 25 years which is equal to the duration of the concession
arrangement following the completion of the construction phase.
The Service Concession Arrangement has been accounted under the intangible asset model since the
Company, as operator, is paid by the users and the concession grantor has not provided any contractual
guarantees with respect to the recoverability of the investment. The intangible asset corresponds to the
right granted by the concession grantor to the Company to charge users of the airport services.
The Service Concession Arrangement consists of the fair value of acquiring the service concession
which principally includes the cost of the usufruct and the costs incurred to construct the infrastructure
(net of government grants received) as well as the present value of the fixed determined future
obligations for the grant of rights fee payable to the Greek State as set out in the ADA.
Amortisation is calculated using the straight-line method to allocate the cost of the right over the
duration of the Service Concession Arrangement which is approximately 25 years.
Any subsequent costs incurred in maintaining the serviceability of the infrastructure is expensed as
incurred unless such cost relate to major upgrades which increase the income generating ability of the
infrastructure. These costs are capitalised as part of the service concession intangible asset and are
amortised on a straight-line basis over the remaining period of the Service Concession Arrangement.
2.4.2 Grant of Rights Fee, Variable Fee component
As set out in the ADA and in respect to the period after the twentieth anniversary of the Agreement
Commencement Date and until the end of the Concession Period, the Company shall pay to the
Greek State per quarter the higher of: (a) a fixed amount of €3,750,000 and (b) 25.0% of 15.0% of the
Consolidated Operating Profits for the Financial Year of the Company ending immediately prior to
such Quarter.
Consolidated Operating Profit IS specifically defined in the ADA as:
(a) the operating profit of the Company and its Subsidiaries (before interest, extraordinary and
exceptional items, taxation calculated on profits or distributions and similar charges), all as determined
on a consolidated basis and excluding amounts attributable to minority interests in Subsidiaries, in
respect of a Financial Year as shown by the Audited Accounts in respect of that Financial Year,
(b) less interest paid during that Financial Year (other than any interest paid on or as a result of a
prepayment or acceleration of all or part of the relevant indebtedness) in respect of indebtedness for
borrowed money incurred in respect of the provision, acquisition, construction, maintenance, repair,
renewal and operation of the assets allocated to Air Activities.
The accounting for the Service Concession Arrangement will continue as determined in 2.4.1, with the
exception that the variable element of the Grant of Rights Fee is expensed to the income statement in
the period in which it relates.
2.4.3 Computer software
Acquired computer software licences are capitalised on the basis of the costs incurred to acquire and
bring to use the specific software. These costs are depreciated over their estimated useful lives (5
years).
Costs associated with developing or maintaining computer software programmes are recognised as an
expense as incurred. Costs that are directly associated with the development of identifiable and unique
software products controlled by the Company, and that will probably generate economic benefits
exceeding costs beyond one year, are recognised as intangible assets. Costs include the employee costs
incurred as a result of developing software and an appropriate portion of relevant overheads.
Financial Statements as at 31 December 2015 (Amounts in Euros unless otherwise stated)
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2.4 Intangible assets
2.4.1 Service concession arrangement
The Service Concession Arrangement refers to the Airport Development Agreement (“ADA”) which
governs the right that has been granted by the Greek State to the Company for the purpose of the
finance, construction, operation and development of the Athens International Airport. The above
right has a finite useful life of approximately 25 years which is equal to the duration of the concession
arrangement following the completion of the construction phase.
The Service Concession Arrangement has been accounted under the intangible asset model since the
Company, as operator, is paid by the users and the concession grantor has not provided any contractual
guarantees with respect to the recoverability of the investment. The intangible asset corresponds to the
right granted by the concession grantor to the Company to charge users of the airport services.
The Service Concession Arrangement consists of the fair value of acquiring the service concession
which principally includes the cost of the usufruct and the costs incurred to construct the infrastructure
(net of government grants received) as well as the present value of the fixed determined future
obligations for the grant of rights fee payable to the Greek State as set out in the ADA.
Amortisation is calculated using the straight-line method to allocate the cost of the right over the
duration of the Service Concession Arrangement which is approximately 25 years.
Any subsequent costs incurred in maintaining the serviceability of the infrastructure is expensed as
incurred unless such cost relate to major upgrades which increase the income generating ability of the
infrastructure. These costs are capitalised as part of the service concession intangible asset and are
amortised on a straight-line basis over the remaining period of the Service Concession Arrangement.
2.4.2 Grant of Rights Fee, Variable Fee component
As set out in the ADA and in respect to the period after the twentieth anniversary of the Agreement
Commencement Date and until the end of the Concession Period, the Company shall pay to the
Greek State per quarter the higher of: (a) a fixed amount of €3,750,000 and (b) 25.0% of 15.0% of the
Consolidated Operating Profits for the Financial Year of the Company ending immediately prior to
such Quarter.
Consolidated Operating Profit IS specifically defined in the ADA as:
(a) the operating profit of the Company and its Subsidiaries (before interest, extraordinary and
exceptional items, taxation calculated on profits or distributions and similar charges), all as determined
on a consolidated basis and excluding amounts attributable to minority interests in Subsidiaries, in
respect of a Financial Year as shown by the Audited Accounts in respect of that Financial Year,
(b) less interest paid during that Financial Year (other than any interest paid on or as a result of a
prepayment or acceleration of all or part of the relevant indebtedness) in respect of indebtedness for
borrowed money incurred in respect of the provision, acquisition, construction, maintenance, repair,
renewal and operation of the assets allocated to Air Activities.
The accounting for the Service Concession Arrangement will continue as determined in 2.4.1, with the
exception that the variable element of the Grant of Rights Fee is expensed to the income statement in
the period in which it relates.
2.4.3 Computer software
Acquired computer software licences are capitalised on the basis of the costs incurred to acquire and
bring to use the specific software. These costs are depreciated over their estimated useful lives (5
years).
Costs associated with developing or maintaining computer software programmes are recognised as an
expense as incurred. Costs that are directly associated with the development of identifiable and unique
software products controlled by the Company, and that will probably generate economic benefits
exceeding costs beyond one year, are recognised as intangible assets. Costs include the employee costs
incurred as a result of developing software and an appropriate portion of relevant overheads.
Financial Statements as at 31 December 2015 (Amounts in Euros unless otherwise stated)
24 of 56
