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Notes to the financial statements
31 December 2014
Bursa Malaysia
•
Annual Report 2014
104
2. Significant accounting policies (cont’d.)
2.4 Summary of significant accounting policies (cont’d.)
(b) Property, plant and equipment and depreciation (cont’d.)
The carrying values of property, plant and equipment are reviewed for impairment when events or changes in circumstances indicate that the carrying
value may not be recoverable.
The residual values, useful lives and depreciation methods are reviewed at each financial year end, and adjusted prospectively, if appropriate.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal.
Any gain or loss on derecognition of the asset is included in the profit or loss in the year the asset is derecognised.
(c) Intangible assets
(i) Goodwill
Goodwill is initially measured at cost. Following initial recognition, goodwill is measured at cost less any accumulated impairment losses.
For the purpose of impairment testing, goodwill acquired is allocated, from the acquisition date, to each of the Group’s and the Company’s
cash-generating units (CGUs) that are expected to benefit from the synergies of the combination.
Where goodwill forms part of a CGU and part of the operation within that CGU is disposed of, the goodwill associated with the operation disposed
of is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed of in this
circumstance is measured based on the relative fair values of the operations disposed of and the portion of the CGU retained.
(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 are assessed to be finite. Computer software are amortised over their estimated useful lives of five to ten
years and assessed for impairment whenever there is an indication that they may be impaired. The amortisation period and the amortisation
method are reviewed at least at each financial year end. Changes in the expected useful lives 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 are measured as the difference between the net disposal proceeds and the
carrying amount of the asset and are 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 goodwill, computer software and property, plant and equipment 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.