Bursa Malaysia • Annual Report 2013
107
Financial Reports
2. Significant accounting policies (cont’d.)
2.4 Summary of significant accounting policies (cont’d.)
(c) Intangible assets (cont’d.)
(ii) Computer software
Computer software is initially measured at cost. Following initial recognition, computer software is measured at cost less accumulated
amortisation and accumulated impairment losses.
The useful lives of computer software is assessed to be finite. Computer software is amortised over their estimated useful lives of five to ten
years and assessed for impairment whenever there is an indication that it may be impaired. The amortisation period and the amortisation
method are reviewed at least at each financial year end. Changes in the expected useful life or the expected pattern of consumption of future
economic benefits embodied in the asset are accounted for by changing the amortisation period or method, as appropriate, and are treated
as changes in accounting estimates. The amortisation expense on computer software with finite lives is recognised in profit or loss.
Projects-in-progress are not amortised as these computer software are not yet available for use.
Gains or losses arising from derecognition of computer software is measured as the difference between the net disposal proceeds and the
carrying amount of the asset and is recognised in profit or loss when the asset is derecognised.
(d) Impairment of non-financial assets
The Group and the Company assess at each financial year end whether there is an indication that an asset may be impaired. If any such
indication exists, or when an annual impairment assessment for an asset is required, the Group and the Company make an estimate of the asset’s
recoverable amount.
For property, plant and equipment, computer software and goodwill that are not yet available for use, the recoverable amount is estimated at each
financial year end or more frequently when indicators of impairment are identified.
An asset’s recoverable amount is the higher of an asset’s fair value less costs to sell and its value-in-use. For the purpose of assessing impairment,
assets are grouped at the lowest levels for which there are separately identifiable cash flows (i.e. CGUs). In assessing value-in-use, the estimated
future cash flows expected to be generated by the asset are discounted to their present value using a pre-tax discount rate that reflects current
market assessments of the time value of money and the risks specific to the asset. Where the carrying amount of an asset exceeds its recoverable
amount, the asset is written down to its recoverable amount. Impairment losses recognised in respect of a CGU or groups of CGUs are allocated
first to reduce the carrying amount of any goodwill allocated to those units or groups of units and then, to reduce the carrying amount of the other
assets in the unit or groups of units on a pro-rata basis.
Impairment losses are recognised in profit or loss except for assets that are previously revalued where the revaluation was taken to other
comprehensive income. In this case, the impairment is also recognised in other comprehensive income up to the amount of any previous
revaluation.
An assessment is made at each financial year end as to whether there is any indication that previously recognised impairment losses may no
longer exist or may have decreased. A previously recognised impairment loss for an asset, other than goodwill, is reversed only if there has been a
change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. If that is the case, the
carrying amount of the asset is increased to its revised recoverable amount. That increase cannot exceed the carrying amount that would have
been determined (net of amortisation or depreciation) had no impairment loss been recognised previously. Such reversal is recognised in profit or
loss unless the asset is measured at revalued amount, in which case the reversal is treated as a revaluation increase. Impairment loss on goodwill
is not reversed in a subsequent period.
Notes to the Financial Statements
31 December 2013
