Annual Report - Ahli United Bank

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Annual Report - Ahli United Bank

3 ACCOUNTING POLICIES (continued)3.3 Summary of significant accounting policies (continued)(k) Business combination, goodwill and other intangible assets (continued)units) is less than the carrying amount, an impairment loss is recognised immediately in the consolidated statement of income.For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated toeach of the Group’s cash-generating units, or groups of cash-generating units, that are expected to benefit from the synergiesof the combination, irrespective of whether other assets or liabilities of the Group are assigned to those units or groups ofunits. Each unit or group of units to which the goodwill is allocated:– represents the lowest level within the Group at which the goodwill is monitored for internal management purposes; and– is not larger than a segment based on either the Group’s primary or the Group’s geographic segment reporting formatdetermined in accordance with IFRS 8 Operating segments.Intangible assets are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at costless any accumulated impairment losses.The useful lives of intangible assets are assessed to be either finite or infinite. Intangible assets with finite lives are amortisedover their useful economic lives and assessed for impairment whenever there is an indication that an intangible asset maybe impaired. Intangible assets with infinite useful lives are not amortised but are tested annually for impairment or morefrequently whenever there is an indication that they may be impaired.(l) Premises and equipmentFreehold land is initially recognised at cost. After initial recognition, freehold land is carried at the revalued amount. Therevaluation is carried out periodically by independent professional property valuers. The resultant revaluation surplus isrecognised, as a separate component under equity. Revaluation deficit, if any, is recognised in the consolidated statement ofincome, except that a deficit directly offsetting a previously recognised surplus on the same asset is directly offset against thesurplus in the revaluation reserve.Premises and equipment are stated at cost, less accumulated depreciation.Depreciation on buildings and other premises and equipment is provided on a straight-line basis over their estimated useful lives.The estimated useful lives of the assets for the calculation of depreciation are as follows:- Freehold buildings 15 to 30 years- Leasehold land and buildings Over the lease period- Other premises and equipment 2 to 5 years(m) Cash and cash equivalentsCash and cash equivalents comprise cash and balances with central banks, excluding mandatory reserve deposits, together withthose deposits with banks and other financial institutions and treasury bills having an original maturity of three months or less.(n) ProvisionsProvisions are recognised when the Group has a present obligation arising from a past event, and the costs to settle theobligation are both probable and able to be reliably estimated.AUB Annual Report 200961

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