7.2. Intangible assets

The right to use geological information is capitalized at the amount of expenses incurred to purchase it. The capitalized expenses are written off throughout the estimated useful life of information. The estimated useful life of geological information is from 2 to 61 years.

The Group recognizes the perpetual usufruct rights acquired against payment as intangible assets and amortizes them throughout the period for which such right had been granted. Perpetual usufruct rights acquired gratuitously are recorded in off-balance sheet records, at the value specified in the administrative decision about the perpetual usufruct fee.

Purchased software licenses are capitalized at the amount of expenses incurred for the purchase and preparation for use of specific computer software. The capitalized costs are written off throughout the estimated useful life of the software, which is 2 to 10 years.

The energy law imposes an obligation for industrial offtakers and power companies to buy and produce for retirement property rights following from certificates of origin of energy, or for them to remit the substitution fee. The property rights following from certificates of origin are created when certificates of origin are entered in the registry of certificates of origin and expire at the time of their retirement. The deadline for the obligation to redeem the certificates of origin or to pay the substitution fees for the year is 31 March of the following year.

Certificates of origin are measured initially at their purchase price, while certificates of origin from the Group’s own production are measured at market prices (of the last day of the month in which the energy, to which the certificates pertain, was produced) in proportion to other operating revenues. If their fair value cannot be determined then the certificates of origin are measured at the unit substitution fee for the year as announced by the President of ERO.