omnia holdings annual report 2010 omnia holdings annu

82 OMNIA ANNUAL REPORT 2010 FINANCIAL STATEMENTS continued
NOTES TO THE GROUP FINANCIAL STATEMENTS continued
for the year ended 31 March 2010
recoverable and carried at cost less accumulated impairment
losses. Impairment losses on goodwill are not reversed. Gains
and losses on the disposal of an entity include the carrying
amount of goodwill relating to the entity sold. Goodwill is
allocated to cash-generating units for the purpose of impairment
testing. The allocation is made to those cash-generating units or
groups of cash-generating units that are expected to benefit
from the business combination in which the goodwill arose.
1.7.2 Other intangible assets
An intangible asset is recognised when it is probable that the
expected future economic benefits that are attributable to the
asset will flow to the Group and the cost of the asset can be
measured reliably. Separately acquired intangible assets are
initially recognised at historical cost. Intangible assets acquired in
a business combination are recognised at fair value at the
acquisition date. Thereafter they are amortised using the
straight-line method over the asset’s estimated useful life.
Annually, the estimated remaining useful life is reviewed.
Intangible assets are not re-valued. The estimated useful lives of
intangible assets are as follows:
� Trademarks and trade secrets 20 years
� Patents 5 – 10 years
� Distribution contracts 10 years
� Software 5 – 10 years
Costs associated with maintaining computer software
programmes are recognised as an expense when incurred.
Costs that are directly associated with the development of
identifiable and unique software products controlled by the
Group, and that will probably generate economic benefits
exceeding costs beyond one year, are recognised as intangible
assets when all of the following criteria are met:
� it is technically feasible to complete the software product so
that it will be available for use;
� management intends to complete the software product and
use it;
� there is an ability to use or sell the software product;
� it can be demonstrated how the software product will
generate probable future economic benefits;
� adequate technical, financial and other resources to
complete the development to use or sell the software are
available; and
� the expenditure attributable to the software product during
its development can be reliably measured.
Costs include employee costs incurred as a result of developing
software and an appropriate portion of relevant overheads. Other
development expenditures that do not meet the criteria are
recognised as an expense as incurred. Development costs
previously recognised as an expense are not recognised as an
asset in a subsequent period.
Computer software development costs recognised as assets are
amortised over their useful lives.
1.7.3 Research and development
Research expenditure is recognised as an expense when
incurred. Costs incurred on development projects (relating to the
design and testing of new or improved products) are recognised
as intangible assets when it is probable that the project will be a
success, considering its commercial and technological feasibility,
and costs can be measured reliably.
Other development expenses are recognised as an expense
as incurred. Development costs previously recognised as an
expense are not recognised as an asset in a subsequent period.
Development costs that have a finite useful life and that have
been capitalised are amortised from the commencement of the
commercial production of the product on a straight-line basis
over the period of its expected benefit.
1.8 Financial assets
(i) Classification
The Group classifies its financial assets in the following
categories: at fair value through profit or loss, loans and
receivables, and available-for-sale. The classification depends on
the purpose for which the financial assets were acquired.
Management determines the classification of its financial assets
on initial recognition.
(a) Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss are financial
assets held for trading. A financial asset is classified in this
category if acquired principally for the purpose of selling in the
short-term. Derivatives are also categorised as held for trading
unless they are designated as hedges.
(b) Loans and receivables
Loans and receivables are non-derivative financial assets with
fixed or determinable payments that are not quoted in an active
market. They are included in current assets, except for
maturities greater than 12 months after the balance sheet date.
These are classified as non-current assets. The Group’s loans
and receivables comprise trade and other receivables and cash
and cash equivalents in the balance sheet.
(c) Available-for-sale financial assets
Available-for-sale financial assets are non-derivatives that are
either designated in this category or not classified in any of the
other categories. They are included in non-current assets unless
management intends to dispose of the investment within
12 months of the balance sheet date.
(ii) Recognition and measurement
Regular purchases and sales of financial assets are recognised
on the trade date – the date on which the Group commits to
purchase or sell the asset. Investments are initially recognised at
fair value plus transaction costs for all financial assets not carried
at fair value through profit and loss. Financial assets carried at
fair value through profit or loss are initially recognised at fair
value, and transaction costs are expensed in the income
statement. Financial assets are derecognised when the right to
receive cash flows from the investments have expired or have
been transferred and the Group has transferred substantially all
the risks and rewards of ownership. Financial assets at fair value
through profit or loss are subsequently carried at fair value.
Loans and receivables are carried at amortised cost using the
effective interest rate method.
Gains or losses arising from changes in the fair value of
“financial assets at fair value through profit or loss” category