Advanced Computer Software Group plc Annual report 2013

3 Significant accounting policiesThe accounting policies adopted in the preparation of the financial statements are consistent with those followed inpreparation of the Group’s annual financial statements for the year ended 29 February 2012.There were no relevant new standards and amendments to standards which were mandatory for the first time forthe financial year beginning 1 March 2012.Property, plant and equipmentProperty, plant and equipment are stated at cost less accumulated depreciation and impairment losses. Where partsof an item of property, plant and equipment have different useful lives, they are accounted for as separate items ofproperty, plant and equipment.DepreciationDepreciation is charged to the income statement on a straight-line basis over the estimated useful lives of each partof an item of property, plant and equipment. The depreciation policies for each class of asset are as follows:Leasehold improvements – over the period of the leaseOffice equipment and furniture – 20% to 331⁄3% straight-lineComputer equipment – 20% to 25% straight-lineLand & buildings – 2% straight-lineDepreciation methods, useful lives and residual values are reviewed at each reporting date.Overview Business review Governance FinancialsIntangiblesGoodwillGoodwill is recognised on the acquisition of a subsidiary and is the difference between the cost of the acquisitionand the fair value of tangible and intangible assets acquired. The carrying value of goodwill is reviewed at eachreporting date, with any impairment charged to the income statement.Research and developmentDevelopment activities involve a plan or design for the production of new or substantially improved computersoftware. Development expenditure is capitalised only if development costs can be measured reliably, the softwareprogram is technically and commercially feasible, future economic benefits are probable, and the Group hassufficient resources available to complete development and to use, lease or sell the asset. The expenditure capitalisedincludes only the cost of gross direct labour that is directly attributable to preparing the asset for its intended use orthird party costs incurred directly on the development activities above.Capitalised development expenditure is measured at cost less accumulated amortisation and accumulatedimpairment losses. Other research and development expenditure not meeting the above criteria is recognisedin the income statement as incurred.Acquired intangiblesFollowing business combinations (see note 11) the assets acquired are classified into tangible and intangible assetsand fair values applied using the principles of IFRS3. This leads to the creation of intangible assets recognised onthe consolidated balance sheet which will be amortised over their estimated useful lives. The assets typicallyrecognised were:1. Brand name2. Customer contracts and relationships3. Technology assets4. Contractual arrangements5. In-progress research and developmentAdvanced Computer Software Group plcAnnual Report 201341