EDC 2014 SR (UPDATED)

EDC 2014 Performance Report
The useful lives of intangible assets are assessed to be either finite or indefinite. Intangible assets
with finite lives are amortized over the useful economic life and assessed for impairment
whenever there is an indication that the intangible asset may be impaired. The amortization period
and amortization method for an intangible asset with a finite useful life is reviewed at least at each
financial year end. Changes in the expected useful life or the expected pattern of consumption of
future economic benefits embodied in the asset is accounted for by changing the amortization
period or method, as appropriate, and treated as changes in accounting estimates. The
amortization expense on intangible assets with finite lives is recognized in profit or loss in the
expense category consistent with the function of the intangible asset.
Gains or losses arising from derecognition of an intangible asset are measured as the difference
between the net disposal proceeds, if any, and the carrying amount of the asset and are recognized
in the consolidated statement of income when the asset is derecognized.
Water Rights
The cost of water rights of FG Hydro is measured on initial recognition at cost.
Following initial recognition of the water rights, the cost model is applied requiring the asset to be
carried at cost less any accumulated amortization and accumulated impairment losses, if any.
Water rights are amortized using the straight-line method over 25 years, which is the term of the
agreement with the National Irrigation Administration (NIA).
Wind Energy Project Development Costs
Project development costs are expensed as incurred until management determines that the project
is technically, commercially and financially viable, at which time, project development costs are
capitalized. Project viability generally occurs in tandem with management’s determination that a
project should be classified as an advanced project, such as, when favorable results of a system
impact study are received, interconnected agreements are obtained and project financing is in
place.
Following initial recognition of the project development cost as an asset, the cost model is applied
requiring the asset to be carried at cost less any accumulated impairment losses. The wind farm
assets will then be presented as property, plant and equipment upon declaration of commerciality.
During the period in which the asset is not yet available for use, the project development costs are
tested for impairment annually, irrespective of whether there is any indication of impairment.
Computer Software and Licenses
The costs of acquisition of computer software and licenses are capitalized as intangible asset if
such costs are not integral part of the related hardware.
These intangible assets are initially measured at cost. Subsequently, these are measured at cost
less accumulated amortization and allowance for impairment losses, if any. Amortization of
computer software is computed using the straight-line method of over 5 years.
Exploration and Evaluation Assets
The Company follows the full cost method of accounting for its exploration costs determined on
the basis of each service contract area. Under this method, all exploration costs relating to each
service contract are accumulated and deferred under the “Exploration and evaluation assets”
account in the consolidated statement of financial position pending the determination of whether
the wells has proved reserves. Capitalized expenditures include costs of license acquisition,
technical services and studies, exploration drilling and testing, and appropriate technical and
administrative expenses. General overhead or costs incurred prior to having obtained the legal
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