ENRICHING LIVES EXPANDING HORIZONS - Maxis

124
Financial Statements
NOTES TO THE
FINANCIAL STATEMENTS
31 December 2011
Continued
3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(c) Property, plant and equipment (continued)
Certain telecommunication assets are stated at the amount of cash or cash equivalent that would have to be paid if the same
or an equivalent asset was acquired. Included in telecommunications equipment are purchased computer software
costs which are integral to such equipment.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when
it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be
measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged
to the income statement during the year in which they are incurred.
Freehold land is not depreciated as it has an infinite life.
Leasehold lands and buildings held for own use are classified as operating or finance leases in the same way as leases of other
assets.
Long-term leasehold land is land with a remaining lease period exceeding 50 years. Leasehold land is amortised over the lease
term on a straight line method, summarised as follows:
Long-term leasehold land
Short-term leasehold land
77 – 90 years
50 years
All property, plant and equipment are depreciated on the straight line method to write off the cost of each category of assets
to its residual value over its estimated useful life, summarised as follows:
Buildings
Telecommunications equipment
Submarine cables (included within telecommunications equipment)
Site decommissioning works
(included within telecommunications equipment)
Motor vehicles
Office furniture, fittings and equipment
42 – 50 years
2 – 20 years*
10 – 25 years
15 years
5 years
3 – 7 years
* In the previous financial year, the useful lives of the telecommunications equipment were estimated at 4 – 20 years. The change to the estimated
useful lives arises due to the newly acquired telecommunications equipment for the Home services segment which is expected to have a shorter estimated
useful life.
Capital work-in-progress comprising mainly telecommunications equipment, submarine cables and renovations are not
depreciated until they are ready for their intended use.
Residual values and useful lives are reassessed and adjusted, if appropriate, at each reporting date.
At each reporting date, the Group assesses whether there is any impairment. Where an indication of impairment exists, the
carrying amount of the asset is assessed and written down immediately to its recoverable amount. See accounting policy
Note 3(g)(i) on impairment of non-financial assets.
Gains and losses on disposals are determined by comparing proceeds with carrying amounts and are included in the income
statement.