ARTA Annual Report 2009 - Auckland Transport

ii)
Operating leases – Land
The operating leases on land are donated assets. They are recognised in the accounts at fair value and
amortised over the life of the underlying leases.
Amortisation of Intangible Assets
The carrying value of an intangible asset with a finite life is amortised on a straight line basis over its
useful life.
Amortisation begins when the asset is available for use and ceases at the date the asset is derecognised.
The amortisation charge for each period is recognised in the income statement.
The useful lives and associated amortisation rate of major classes of intangible assets have been estimated
as follows:
Computer software 3 years (33.3%)
Operational leases 63 years (1.6%)
Impairment of Non-Financial Assets
Assets that are subject to amortisation or depreciation are reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount may not be recoverable or at each balance
sheet date. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds
its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and
value in use. Where the future economic benefits of an asset are not primarily dependent on the asset’s
ability to generate net cash inflows, and where ARTA would, if deprived of the asset, replace its remaining
future economic benefits, value in use is determined as the depreciated replacement cost of the asset.
For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are
separately identifiable cash flows.
If an asset’s carrying amount exceeds its recoverable amount, the asset is impaired and the carrying
amount is written down to the recoverable amount. The total impairment loss is recognised in the
income statement.
Assets that have an indefinite useful life are not subject to amortisation and are tested annually
for impairment.
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