10 Intangible assets

(CHF 1,000)	Intangible asset from right of formal expropriation	Investments in airport operator projects	Other intangible assets
Cost

Balance as at 1 January 2016	210,043	0	69,386
Additions	0	0	0
Disposals	–21,485	0	–916
Transfer	0	0	7,887
Balance as at 31 December 2016	188,558	0	76,357

Balance as at 1 January 2017	188,558	0	76,357
Additions	0	51,294	434
Disposals	0	0	–425
Transfer	0	0	8,596
Changes in consolidation scope	0	25,800	0
Balance as at 31 December 2017	188,558	77,094	84,962


Depreciation, amortisation

Balance as at 1 January 2016	–48,687	0	–62,521
Additions	–4,248	0	–4,246
Disposals	0	0	816
Balance as at 31 December 2016	–52,935	0	–65,951

Balance as at 1 January 2017	–52,935	0	–65,951
Additions	–3,941	–1,901	–4,390
Disposals	0	0	391
Balance as at 31 December 2017	–56,876	–1,901	–69,950


Net carrying amount as at 1 January 2016	161,356	0	6,865
Net carrying amount as at 31 December 2016	135,623	0	10,406
Net carrying amount as at 31 December 2017	131,682	75,193	15,012

Intangible asset from right of formal expropriation

With the award of the operating licence, Flughafen Zürich AG was also granted a right of formal expropriation in respect of property owners exposed to aircraft noise. This right of formal expropriation was granted on condition that the airport operator bears the costs associated with compensation payments and is recognised as an intangible asset at the date when the probable total cost can be estimated based on final-instance court rulings, so that the cost can be reliably estimated in accordance with IAS 38.21.

As a result of the Swiss Federal Supreme Court rulings in the first half of 2016 in test cases regarding claims for compensation due to eastern and southern approach routes, Flughafen Zürich AG was able, as at 30 June 2016, to undertake a reappraisal of the outstanding costs for formal expropriations. Based on the recalculation, the provision for formal expropriations was reduced by CHF 21.5 million (see note 19, Provision for formal expropriations plus sound insulation and resident protection). At the same time, the intangible asset from the right of formal expropriation was reduced by the same amount.

As at 31 December 2017, Flughafen Zürich AG has therefore recognised an intangible asset from the right of formal expropriation in the amount of CHF 131.7 million (2016: CHF 135.6 million). This is amortised using the straight-line method over the remaining term of the operating licence (i.e. until May 2051).

Investments in airport operator projects

The investments in airport operator projects in the amount of CHF 75.2 million (2016: CHF 0.0 million) include concession rights which, due to the application of IFRIC 12, comprise minimum concession payments recognised as assets and investments made. They relate to the upgrade and operation of the Chilean airports in Antofagasta and Iquique (CHF 24.4 million), in which Flughafen Zürich AG has held a controlling interest via its subsidiary A-port Chile S.A. since April 2017, as well as the upgrade and operation of the Brazilian airport in Florianópolis (CHF 50.8 million) through the subsidiary Concessionária do Aeroporto Internacional de Florianópolis S.A. The liabilities relating to the corresponding concessions amounting to CHF 11.7 million (2016: CHF 0.0) are recognised as non-current liabilities (see note 18, Financial liabilities).

Impairment

Flughafen Zürich AG voluntarily carries out a calculation at company level on a yearly basis to determine whether there is any indication that property, plant and equipment (see note 8, Property, plant and equipment) and intangible assets may be impaired. The calculation is based on expected future free cash flows of Flughafen Zürich AG and various assumptions regarding future trends (e.g. passenger and traffic volumes, investments, the hub status of Zurich Airport and the discount rate). The calculation as at 31 December 2017 did not identify any indications of impairment.