Notes to the Financial Statements - SingTel

Notes to the Financial StatementsFor the financial year ended 31 March 20112.15 Intangible Assets (Cont’d)2.15.2 Other intangible assetsExpenditure on telecommunication and spectrum licences is capitalised and amortised using the straight-line method over theirestimated useful lives of 12 to 25 years. Customer relationships or customer contracts acquired in business combinations arecarried at fair values at date of acquisition, and amortised on a straight-line basis over the period of the expected benefits, whichis estimated at 5 to 10 years.Other intangible assets are stated at cost less accumulated amortisation and accumulated impairment losses.2.16 Impairment of Non-financial AssetsGoodwill on acquisition of subsidiaries, which has an indefinite useful life, is subject to annual impairment tests or morefrequently tested for impairment if events or changes in circumstances indicate that it might be impaired. Goodwill is notamortised (see Note 2.15.1).Other intangible assets of the Group, which have definite useful lives and are subject to amortisation, as well as property,plant and equipment and investments in subsidiaries, associated and joint venture companies, are reviewed at the end of eachreporting period to determine whether there is any indicator for impairment, or whenever events or changes in circumstancesindicate that the carrying amount may not be recoverable. If any such indication exists, the assets’ recoverable amounts areestimated.For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiablecash flows (cash-generating units).An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. Therecoverable amount is the higher of the asset’s fair value less costs to sell and value-in-use.An impairment loss for an asset, other than goodwill on acquisition of subsidiaries, is reversed if, and only if, there has beena change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised.Impairment loss on goodwill on acquisition of subsidiaries is not reversed in the subsequent period.2.17 InventoriesInventories are stated at the lower of cost and net realisable value. Cost is determined on the weighted average basis. Netrealisable value is the estimated selling price in the ordinary course of business, less the estimated cost of completion andselling expenses.Work-in-progress is stated at costs less progress payments received and receivable on uncompleted information technologyand engineering services, and fibre rollout. Costs include third party hardware and software costs, direct labour and other directexpenses attributable to the project activity and associated profits recognised on projects-in-progress. When it is probable thattotal contract costs will exceed total contract revenue, the expected loss is recognised as an expense immediately.Work-in-progress is presented in the consolidated statement of financial position as “Work-in-progress” (as a current asset) or“Excess of progress billings over work-in-progress” (as a current liability) as applicable.Inventories include maintenance spares acquired for the purpose of replacing damaged or faulty plant or equipment. Until theyare used, they are amortised over the useful life of the plant and equipment they support. When used, the unamortised balanceis expensed.ANNUAL REPORT 2010/2011 111