Annual Report 2012, PDF - Axiata Group Berhad - Investor Relations

NOTES TO THEFINANCIAL STATEMENTSFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2012 (CONTINUED)3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)(b) Intangible assets(i)GoodwillGoodwill represents the excess of the cost of acquisition of subsidiaries over the Group’s share of thefair value of the identifiable net assets including contingent liabilities of subsidiaries at the date ofacquisition.For the purpose of impairment testing, goodwill acquired in a business combination is allocated to eachof the cash generating units (“CGUs”), or groups of CGUs, that is expected to benefit from thesynergies of the combination. Each unit or group of units to which the goodwill is allocated representsthe lowest level within the entity at which the goodwill is monitored for internal management purposes.Goodwill is monitored at the operating segment level.Goodwill impairment reviews are undertaken annually or more frequently if events or changes incircumstances indicate a potential impairment. The carrying value of goodwill is compared to therecoverable amount, which is the higher of value in use and the fair value less costs to sell. Anyimpairment is recognised immediately as an expense and is not subsequently reversed.(ii)LicensesThe Group’s licenses are mainly consisting acquired telecommunication licences with allocated spectrumrights and tower operating license. Acquired licenses are shown at cost. Licenses have finite useful livesand are carried at cost less accumulated amortisation. Amortisation is calculated using straight-linemethod, from the effective date of commercialisation of services, subject to impairment, to the end ofthe assignment period. Licenses are not revalued. The estimated useful lives of the acquiredtelecommunication licenses with allocated spectrum rights and tower operating license of the Groupare as follows:MalaysiaIndonesiaSri LankaBangladeshCambodia10 years10 years10 – 15 years15 years30 years(iii) Subscriber acquisition costsSubscriber acquisition costs incurred in providing the customer a free or subsidised handset, providedthe customer signs a non-cancellable contract for a predetermined contractual period, are amortisedover the contractual period on a straight line method.Subscriber acquisition costs are assessed at each reporting date whether there is any indication thatthe subscriber acquisition cost may be impaired.182