Annual Report 2012 - Dialog

62 l Dialog Axiata PLC l Annual Report 2012
Notes to the Financial Statements
2 Summary of significant accounting policies contd.
2.4 Property, plant and equipment (PPE ) Contd.
(b) Asset exchange transaction
PPE may be acquired in exchange for a non-monetary asset or for a combination of monetary and non-monetary assets
and is measured at fair value unless;
the exchange transaction lacks commercial substance; or
the fair value of neither the assets received nor the assets given up can be measured reliably.
The acquired item is measured in this way even if the Company and the Group cannot immediately derecognise the assets
given up. If the acquired item cannot be reliably measured at fair value, its cost is measured at the carrying amount of the
asset given up.
(c) Repairs and maintenance
Repairs and maintenance are charged to the profit or loss in the statement of comprehensive income during the period in
which they are incurred. The cost of major renovations is included in the carrying amount of the asset when it is probable
that future economic benefits in excess of the originally assessed standard of performance of the existing asset will flow to
the Company and the Group. This cost is depreciated over the remaining useful life of the related asset.
2.5 Intangible assets
(a) Goodwill
Goodwill represents the excess of the cost of an acquisition over the fair value of the Group’s share of the net identifiable
assets of the acquired subsidiary at the date of acquisition. Goodwill on acquisitions of subsidiaries is included under
intangible assets. Goodwill acquired in a business combination is tested annually for impairment, or more frequently if events
or changes in circumstances indicate that it might be impaired and carried at less than costs less accumulated impairment
losses. Impairment losses on goodwill are not reversed.
Goodwill is allocated to cash-generating units (‘CGU’) for the purpose of impairment testing. Each CGU or a group of CGUs
represents the lowest level within the Group at which goodwill is monitored for internal management purposes and which
are expected to benefit from the synergies of the combination.
(b) Licenses
Separately acquired licenses are shown at historical cost. Licenses acquired in a business combination are recognised at
fair value at the acquisition date. Licenses have a finite useful life and are carried at cost less accumulated amortisation.
Amortisation is calculated using the straight-line method to allocate the cost of licenses over their estimated useful lives
which is between 10 to 15 years.
(c) Computer software
Acquired computer software licenses are capitalised on the basis of the costs incurred to acquire and bring to use the
specific software. These costs are amortised over their estimated useful life of 2 years.
Costs associated with maintaining computer software programmes are recognised as an expense as incurred. Costs that
are directly associated with the production of identifiable and unique software products controlled by the Group, and that will
probably generate economic benefits exceeding costs beyond one year, are recognised as intangible assets. These directly
attributable costs include the software development employee costs and an appropriate portion of relevant overheads.