9 Intangible assets

Intangible assets of €4,735 million (€4,710 million at 31 December 2013) comprise:

Intangible assets with a finite useful life (€4,726 million) mainly concern: (i) assets recognised in relation to concession agreements pursuant to IFRIC 12 relating to the natural gas distribution business segment (€3,886 million); and (ii) concessions for natural gas storage (€655 million).

Intangible assets with an indefinite useful life (€9 million) consist only of the goodwill recognised in 2008 following the acquisition by Italgas of 100% of the shares of Siciliana Gas.

Investments in intangible assets of €166 million (€156 million in the first half of 2013) relate mainly to: (i) the construction and upgrading of natural gas distribution infrastructure (€140 million); and (ii) internal projects for IT system development (€26 million).

Other changes (-€17 million) refer mainly to grants for the period.

Due to the nature of the activities carried out by the Group, or of regulated activities in the gas supply chain, the recoverable value of property, plant and equipment and intangible assets is defined in keeping with the estimated value of net invested capital recognised for such assets for tariff purposes (regulatory asset base, or RAB) by the Authority, net of flat-fee components, the provision for employee severance pay (TFR) and grants received. Management found no indicators of impairment in Snam’s business segments when preparing this report. The recoverable value is approximately €24 billion⁶.

For the purposes of identifying cash-generating units (CGUs) and allocating any goodwill, in accordance with the segmentation defined by the Authority for the definition of return on assets, the CGUs are represented by the business units (BUs) that carry out regulated activities in the natural gas transportation, regasification, storage and distribution sectors. For the distribution sector, in view of the specific applicable regulation, the CGUs are identified with multi-municipality minimum geographical areas (ATEMs).

Existing contractual commitments for the purchase of intangible assets, and of services related to their development, are disclosed in Note 22, “Guarantees, commitments and risks”.