ENRICHING LIVES EXPANDING HORIZONS - Maxis

136
Financial Statements
NOTES TO THE
FINANCIAL STATEMENTS
31 December 2011
Continued
3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(w) Contingent liabilities
The Group does not recognise a contingent liability but discloses its existence in the financial statements. A contingent
liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence of one or
more uncertain future events beyond the control of the Group or a present obligation that is not recognised because it is
not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in the
extremely rare circumstance where there is a liability that cannot be recognised because it cannot be measured reliably.
In the acquisition of subsidiaries by the Group under a business combination, the contingent liabilities assumed are measured
initially at their fair value at the acquisition date, irrespective of the extent of any non-controlling interests.
The Group recognises separately the contingent liabilities of the acquiree as part of allocating the cost of a business
combination where their fair values can be measured reliably. Where the fair values cannot be measured reliably, the resulting
effect will be reflected in the goodwill arising from the acquisition.
Subsequent to the initial recognition, the Group measures the contingent liabilities that are recognised separately at the date
of acquisition at the higher of the amount that would be recognised in accordance with the provisions of FRS 137 and the
amount initially recognised less, when appropriate, cumulative amortisation recognised in accordance with FRS 118.
(x) Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decisionmakers.
The chief operating decision-makers comprise the Directors, Chief Executive Officer, Chief Financial Officer and
Joint Chief Operating Officers. The chief operating decision-makers are responsible for allocating resources, assessing
performance of the operating segments and making strategic decisions.
Segment revenues and expenses are those amounts resulting from the operating activities of a segment that are directly
attributable to the segment and the relevant portion that can be allocated on a reasonable basis to the segment. Segment
revenues and expenses are determined before intragroup balances and intragroup transactions are eliminated as part of the
consolidation process, except to the extent that such intragroup balances and transactions are between group companies
within a single segment.
4 CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS
Estimates and judgments are continually evaluated by the Directors and are based on historical experience and other factors,
including expectations of future events that are believed to be reasonable under the circumstances.
Critical accounting estimates and assumptions
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, rarely
equal the related actual results. To enhance the information content of the estimates, certain key variables that are anticipated
to have material impact on the Group’s results and financial position are tested for sensitivity to changes in the underlying
parameters. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts
of assets and liabilities within the next financial year are outlined below.
(a) Intangible assets
The telecommunications licences with allocated spectrum rights are not subject to amortisation and are tested annually for
impairment as the Directors are of the opinion that the licences can be renewed in perpetuity at negligible cost and the
associated spectrum rights, similar to land, have an infinite economic useful life. Correspondingly, deferred tax has not been
recognised.