A breakdown of and changes in intangible assets for 2020 are shown below.
|Millions of euro||Development expenditure||Industrial patents & intellectual property rights||Concessions, licenses, trademarks and similar rights||Service concession arrangements||Other||Leasehold improvements||Assets under development and advances||Contract costs||Total|
|Cost net of accumulated impairment losses||46||2,767||15,083||6,987||3,747||10||1,060||1,275||30,975|
|Balance at Dec. 31, 2019||23||582||13,246||2,617||945||7||1,060||609||19,089|
|Assets entering service||4||176||10||-||311||-||(501)||-||-|
|Change in the consolidation scope||(2)||-||-||-||59||-||59||-||116|
|Reclassifications from/to assets held for sale||-||-||(2)||-||-||-||(53)||-||(55)|
|Cost net of accumulated impairment losses||44||2,985||12,988||5,452||4,821||10||1,337||1,581||29,218|
|Balance at Dec. 31, 2020||21||567||11,420||2,108||1,495||6||1,337||714||17,668|
In 2020, the Enel Group renewed and strengthened its commitment to the enhancement and development of its intellectual assets as a source of competitive advantage for the Group, which is increasingly directed at achieving its strategic objectives for decarbonization, electrification and the creation of platforms.
In this regard, the increase in investment in intangible assets is particularly evident, with special regard to IT and digital applications, whether legally protected or not. The investments focused on all the Group’s Global Business Lines and mainly concerned internally developed software (i.e. internal customization of software purchased externally). Among these, we highlight:
- the technological infrastructure of Paytipper, consisting of an application bus into which peripheral interfaces developed to meet different operational needs are integrated, with the goal of handling managing millions of financial transactions per day. Other monitoring and control modules enable users to carry out supervisory, audit and performance analysis activities;
- investments in networks for the management of smart meters, remote grid control and communication software;
- investments at Enel X in demand response systems;
- investments in power generation for predictive maintenance systems;
- additional customizations of Group ERP (Enterprise Resource Planning).
The patent activity of the Group is also proving to be prolific, involving as many as 837 applications for patents in 137 technological families. Of these, 692 have been granted and 145 are pending.
The Group also intends to continue to support and encourage the development of its innovation model through specific projects for internal dissemination by the Intellectual Property unit and through the creation of specific tools to identify, ascertain, protect and preserve on an iterative basis all information of value generated in Enel in accordance with the Open Innovability® model. For more information, please see the “Innovation and digitalization” section of the “Performance & Metrics” chapter of the Report on Operations.
The following table reports service concession arrangements that do not fall within the scope of IFRIC 12 and had a balance as at December 31, 2020.
|Millions of euro|
|Grantor||Activity||Country||Concession period||Concession period remaining||Renewal option||at Dec. 31, 2020||Initial fair value|
|Endesa Distribución Eléctrica||-||Electricity distribution||Spain||Indefinite||Indefinite||-||5,678||5,673|
|Codensa||Republic of Colombia||Electricity distribution||Colombia||Indefinite||Indefinite||-||1,291||1,839|
|Enel Distribución Chile (formerly Chilectra)||Republic of Chile||Electricity distribution||Chile||Indefinite||Indefinite||-||1,388||1,667|
|Enel Distribución Perú (formerly Empresa de Distribución Eléctrica de Lima Norte)||Republic of Peru||Electricity distribution||Peru||Indefinite||Indefinite||-||535||548|
|E-Distribuţie Muntenia||Romanian Ministry for the Economy||Electricity distribution||Romania||2005-2054||33 years||Yes||125||191|
The item includes assets with an indefinite useful life in the amount of €8,892 million (€9,218 million at December 31, 2019), essentially accounted for by concessions for distribution activities in Spain (€5,678 million), Colombia (€1,291 million), Chile (€1,388 million), and Peru (€535 million), for which there is no statutory or currently predictable expiration date. On the basis of the forecasts developed, cash flows for each CGU, with which the various concessions are associated, are sufficient to recover the carrying amount. The change during the year is essentially attributable to changes in exchange rates. For more information on service concession arrangements, see note 18.
The change in the consolidation scope for 2020 mainly reflects the acquisition of a number of companies in Spain and the PPA of Paytipper SpA and to a number of renewables companies in Italy.
Impairment losses amounted to €33 million in 2020. For more information, see note 10.e.
“Other changes” report the design costs connected with the acquisition of a number of Brazilian vehicle companies.