98
ANNUAL REPORT 2016
NOTES TOTHE FINANCIAL STATEMENTS
30 JUNE 2016
(Continued)
4.
SIGNIFICANT ACCOUNTING POLICIES (continued)
4.8 Intangible assets (continued)
(a)
Goodwill (continued)
After initial recognition, goodwill is measured at cost less accumulated impairment losses, if any. Goodwill is not amortised
but instead tested for impairment annually or more frequently if events or changes in circumstances indicate that the carrying
amount could be impaired. Objective events that would trigger a more frequent impairment review include adverse industry or
economic trends, significant restructuring actions, significantly lowered projections of profitability, or a sustained decline in the
acquiree’s market capitalisation. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating
to the entity sold.
Goodwill arising on acquisition of an associate is the excess of cost of investment over the share of the net fair value of net assets
of the associates’ identifiable assets and liabilities by the Group at the date of acquisition.
Goodwill relating to the associate is included in the carrying amount of the investment and is not amortised. The excess of the
share of the net fair value of the associate’s identifiable assets and liabilities by the Group over the cost of investment is included
as income in the determination of the share of the associate’s profit or loss by the Group in the period in which the investment
is acquired.
(b)
Other intangible assets
Other intangible assets are recognised only when the identifiability, control and future economic benefit probability criteria are met.
The Group recognises at the acquisition date separately from goodwill, an intangible asset of the acquiree, irrespective of
whether the asset had been recognised by the acquiree before the business combination.
Intangible assets are initially measured at cost. The cost of intangible assets recognised in a business combination is their fair
values as at the date of acquisition.
After initial recognition, intangible assets are carried at cost less any accumulated amortisation and any accumulated impairment
losses. The useful lives of intangible assets are assessed to be either finite or indefinite. Intangible assets with finite lives are
amortised on a straight line basis over the estimated economic useful lives and are assessed for any indication that the asset
could be impaired. If any such indication exists, the entity shall estimate the recoverable amount of the asset. The amortisation
period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at the end of each
reporting period. The amortisation expense on intangible assets with finite lives is recognised in profit or loss and is included
within the other operating expenses line item.
An intangible asset has an indefinite useful life when based on the analysis of all the relevant factors, there is no foreseeable
limit to the period over which the asset is expected to generate net cash inflows to the Group. Intangible assets with indefinite
useful lives are tested for impairment annually and wherever there is an indication that the carrying amount may be impaired.
Such intangible assets are not amortised. Their useful lives are reviewed at the end of each reporting period to determine
whether events and circumstances continue to support the indefinite useful life assessment for the asset. If they do not, the
change in the useful life assessment from indefinite to finite is accounted for as a change in accounting estimate in accordance
with MFRS 108
Accounting Policies, Changes in Accounting Estimates and Errors
.
Expenditure on an intangible item that are initially recognised as an expense is not recognised as part of the cost of an intangible
asset at a later date.
An intangible asset is derecognised on disposal or when no future economic benefits are expected from its use. The gain or loss
arising from the derecognition determined as the difference between the net disposal proceeds, if any, and the carrying amount
of the asset is recognised in profit or loss when the asset is derecognised.
Trademarks
Acquired trademarks that have finite useful lives are carried at cost less accumulated amortisation and any accumulated
impairment losses. Amortisation is calculated using the straight line method to allocate the cost of trademarks over their
estimated useful lives of seven (7) to forty (40) years. Cost of renewing trademarks is recognised in profit or loss as incurred.
Trademarks with indefinite useful lives are tested for impairment annually and wherever there is an indication that the carrying
amount may be impaired.
