2009-10 Annual Report - Australia Post

notes to And ForminG PArt oF the FinAnCiAl rePort For the year ended 30 June 2010
When the recoverable amount of the cash-generating unit (group of
cash-generating units) is less than the carrying amount, an impairment
loss is recognised. When goodwill forms part of a cash-generating unit
(group of cash-generating units) and an operation within that unit 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
manner is measured based on the relative values of the operation
disposed of and the portion of the cash-generating unit retained.
impairment losses recognised for goodwill are not subsequently reversed.
(y) intangible assets
intangible assets acquired separately or in a business combination are
initially measured at cost. the cost of an intangible asset acquired in
a business combination is its fair value as at the date of acquisition.
Following initial recognition, intangible assets are carried at cost less
any accumulated amortisation and any accumulated impairment losses.
internally generated intangible assets, excluding capitalised
development costs, are not capitalised and expenditure is recognised
in profit and loss in the year in which the expenditure is incurred.
the useful lives of intangible assets are assessed to be either finite
or indefinite. intangible assets with finite lives are amortised over their
useful life and tested for impairment whenever there is an indication that
the intangible asset may be impaired. the amortisation period and the
amortisation method for an intangible asset with a finite useful life 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 prospectively by
changing the amortisation period or method, as appropriate, which is a
change in accounting estimate. the amortisation expense on intangible
assets with finite lives is recognised in profit or loss in the expense
category consistent with the function of the intangible asset.
intangible assets with indefinite useful lives are tested for impairment
annually either individually or at the cash-generating unit level consistent
with the methodology outlined for goodwill above. such intangibles are
not amortised. the useful life of an intangible asset with an indefinite life
is reviewed each reporting period to determine whether indefinite life
assessment continues to be supportable. if not, the change in the useful
life assessment from indefinite to finite is accounted for as a change in
an accounting estimate and is thus accounted for on a prospective basis.
computer software is carried at cost and is amortised on a straight-line
basis over its anticipated useful life, being four to eight years.
research and development costs
research costs are expensed as incurred. an intangible asset arising
from development expenditure on an internal project is recognised only
when the group can demonstrate the technical feasibility of completing
the intangible asset so that it will be available for use or sale, its intention
to complete and its ability to use or sell the asset, how the asset will
generate future economic benefits, the availability of resources to
complete the development and the ability to measure reliably the
expenditure attributable to the intangible asset during its development.
Following the initial recognition of the development expenditure, the
cost model is applied requiring the asset to be carried at cost less any
accumulated amortisation and accumulated impairment losses. any
expenditure so capitalised is amortised over the period of expected
benefits from the related project.
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AustrAliA Post AnnuAl rePort 2009–10 | Financial and statutory reports
the carrying value of an intangible asset arising from development
expenditure is tested for impairment annually when the asset is not yet
available for use or more frequently when an indication of impairment
arises during the reporting period.
Gains or losses arising from derecognition of an intangible asset 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.
(z) impairment of non-financial assets (other than goodwill
and indefinite life intangibles)
the group assesses at each reporting date whether there is an
indication that an asset may be impaired. if any such indication exists
or when annual impairment testing for an asset is required, the group
makes an estimate of the asset’s recoverable amount. an asset’s
recoverable amount is the higher of its fair value less costs to sell and
its value in use and is determined for an individual asset, unless the
asset does not generate cash inflows that are largely independent of
those from other assets or groups of assets and the asset’s value in use
cannot be estimated to be close to its fair value. in such cases the asset
is tested for impairment as part of the cash-generating unit to which it
belongs. When the carrying amount of an asset or cash-generating unit
exceeds its recoverable amount, the asset or cash-generating unit is
considered impaired and is written down to its recoverable amount.
in assessing value in use, the estimated future cashflows 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. impairment losses relating to continuing operations are
recognised in those expense categories consistent with the function
of the impaired asset unless the asset is carried at revalued amount
(in which case the impairment loss is treated as a revaluation decrease).
an assessment is also made at each reporting date as to whether
there is any indication that previously recognised impairment losses
may no longer exist or may have decreased. if such indication exists, the
recoverable amount is estimated. a previously recognised impairment
loss 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 recoverable amount. that increased amount
cannot exceed the carrying amount that would have been determined,
net of depreciation, had no impairment loss been recognised for the
asset in prior years. such reversal is recognised in profit or loss, unless
the asset is carried at a revalued amount, in which case the reversal is
treated as a revaluation increase. after such a reversal, the depreciation
charge is adjusted in future periods to allocate the asset’s revised
carrying amount, less any residual value, on a systematic basis over
its remaining useful life.
(aa) trade and other payables
trade and other payables are carried at amortised cost and due to their
short-term nature they are not discounted. they represent liabilities for
goods and services provided to the group before the end of the financial
year that are unpaid and arise when the group becomes obliged to make
future payments in respect of the purchase of these goods and services.