United Energy Group Limited - HKExnews

UNITED ENERGY GROUP LIMITED
Notes to the Financial Statements
For the nine months ended 31 December 2009
4. CRITICAL JUDGEMENT AND KEY ESTIMATES (Continued)
Key sources of estimation uncertainty (Continued)
(C)
Intangible assets and amortisation
The Group determines the estimated useful lives and related amortisation for the Group’s intangible assets.
The useful lives of intangible assets are assessed to be either finite or indefinite, based on the expected
usage and technical obsolescence from the changes in the market demands or services output from the
assets. Intangible assets with finite useful lives are amortised over the expected useful economic lives.
The amortisation period and the amortisation method for the intangible assets with finite useful lives are
reviewed by the management at least at the end of each reporting period.
(D)
Impairment of intangible assets
The Group conducts impairment reviews of intangible assets whenever events or changes in circumstances
indicate that their carrying amounts may not be recoverable in accordance with the relevant accounting
standards. The recoverable amounts of intangible assets have been determined based on fair value less
costs to sell calculations. These calculations require the use of estimates.
(E)
Share-based payments expenses
The fair value of the share options granted determined at the date of grant of the respective share options is
expensed over the vesting period, with a corresponding adjustment to the Group’s share-based payments
reserve. In assessing the fair value of the share options, the Black-Scholes option pricing model (the “Black-
Scholes Model”) was used. The Black-Scholes Model is one of the generally accepted methodologies
used to calculate the fair value of the share options. The Black-Scholes Model requires the input of
subjective assumptions, including the expected volatility and expected life of options. Any changes in these
assumptions can significantly affect the estimate of the fair value of the share options.
5. FINANCIAL RISK MANAGEMENT
The Group’s activities expose it to a variety of financial risks: interest rate risk, liquidity risk, credit risk, price risk
and foreign currency risk. The Group’s overall risk management programme focuses on the unpredictability of
financial markets and seeks to minimise potential adverse effects on the Group’s financial performance.
(a)
Interest rate risk
The Group’s exposure to interest-rate risk arises from its bank deposits.
The Group’s certain bank deposits mainly bear interest at variable rates varied with the then prevailing
market condition.
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