Note 4 Intangible assets

In 2021, the discontinued consolidations item relates entirely to the sale of 75% of the shares in 450connect GmbH. Please see note [22] for further information. The amortisation of €6 million in 2021 mainly relates to the intangible assets of TReNT.

All the shares in Ebatech B.V. were acquired in 2021, whereby no goodwill was recognised. In 2020, Alliander acquired all shares in TReNT B.V. and TReNT Infra B.V., for which acquisition goodwill amounting to €18 was recognised. The intangible assets for TReNT (€14 million) comprise the contract value for the rental of telecom lines. Please see note [1] for further information about this acquisition. The remaining amortisation period is 20 years. The amortisation of €2 million in 2020 mainly relates to intangible assets.

Goodwill allocation by segment

Of the total amount of goodwill allocated to Liander as at year-end 2021, €209 million (2020: €209 million) relates to electricity and gas networks and dates from the contribution of the networks when N.V. Nuon was created in 1999. Of the remainder, amounting to €77 million (2020: €77 million), €61 million relates to the purchase of Endinet in 2010, €7 million to Stam and €9 million to the purchase of AEF B.V. in 2016. The goodwill item in the other line concerns the investment relating to 450connect and TReNT.

At year-end 2021, impairment tests were performed on the value of the Liander networks, the TReNT telecommunications networks and the district heating network in Hengelo, including the associated goodwill. The value in use was taken as the basis for this calculation. The value in use was measured on the basis of the most recent business plans.

In the 2021 financial year, Liander applied a pre-tax fair discount rate of 4% (2020: 7.1%). This figure will gradually drop to 2.8% in 2026. The main assumptions on which the business plans are based are the number of connections, the most recent tariff estimates and estimates of operating expenses and other costs. To a large extent, these assumptions are based on past experience, coupled with the latest information on tariff regulation. The business plans cover a period of five years and the terminal value is calculated using the projected cash flows at the end of that period. A zero-growth rate has been applied. The terminal value for the regulated activities is based on achieving the ‘reasonable return’ that a network operator can expect to achieve on its standardised asset value. Where appropriate, account is also taken of temporary or structural synergistic effects or other departures from the reasonable return. There is such a margin between the value in use and the carrying amount of the Liander networks that the sensitivity to changes in the estimates and assumptions used is limited.

A pre-tax discount rate of 7.1% was applied for the telecom networks (2020: 7.3%). From the impairment test it emerged that the margin between the value in use and the carrying amount, including goodwill, is such that the sensitivity to changes in the estimates and assumptions used is limited.

A pre-tax discount rate of 8.5% was applied for the impairment test performed on the assets of Warmtenet Hengelo. The test revealed an impairment of less than €1 million.