Annual Report 2008-2009 - Emirates.com

2. Summary of significant accounting policies (continued)
Depreciation is calculated so as to write off the cost of property, plant and equipment on a straight line basis over the estimated useful
life of the assets concerned. The estimated useful lives are:
Buildings 5 - 20 years
Leasehold property over the remaining term of the lease
Airport plant and equipment 5 - 10 years
Office equipment and furniture 3 - 5 years
Motor vehicles 5 years
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date.
When the carrying amount of property, plant and equipment is greater than its estimated recoverable amount, it is written down
immediately to its estimated recoverable amount and is reviewed at each balance sheet date for possible reversal of the impairment
charges.
Capital projects are stated at cost. When the asset is ready for its intended use, it is transferred from capital projects to the appropriate
category under property, plant and equipment and depreciated in accordance with Dnata’s policies.
Gains and losses on disposal are determined by comparing proceeds with the carrying amount and recognised in the consolidated
income statement.
Intangible assets
Intangible assets are capitalised at cost only when future economic benefits are probable. Cost includes purchase price together with
any directly attributable expenditure.
When the carrying amount of an intangible asset is greater than its estimated recoverable amount, it is written down immediately to its
estimated recoverable amount and is reviewed at each balance sheet date for possible reversal of the impairment loss.
Intangible assets are amortised on a straight-line basis over the estimated useful lives, which are:
Computer software 5 years
Customer relationships 3 - 5 years
Contractual rights over the term of the rights
Goodwill
Goodwill represents the excess of the cost of an acquisition over the fair value of the share of the identifiable net assets acquired by
Dnata in its subsidiaries at the date of acquisition. Goodwill is presented with intangible assets.
Goodwill is tested annually for impairment and carried at cost less accumulated impairment loss. For the purpose of impairment testing,
goodwill is allocated to cash generating units that are expected to benefit from the business combination in which the goodwill arose.
An impairment loss is recognised when the carrying value of the cash generating unit exceeds its recoverable amount. Impairment loss
on goodwill is not reversed. Gains and losses on disposal of an entity include the carrying amount of goodwill relating to the entity sold.
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market.
Such amounts are initially recognised at fair value including transaction costs and carried at amortised cost using the effective interest
method. The amounts are derecognised when rights to receive cash flows have expired or have been transferred along with substantially
all the risks and rewards of ownership.
At each balance sheet date, an assessment is made whether there is any objective evidence of impairment. Where necessary the
carrying amount is written down through the consolidated income statement to the present value of expected future cash flows
discounted at the effective interest rate computed at initial recognition.
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