Notes to the Financial Statements - Cahaya Mata Sarawak Bhd

90
Notes to the Financial Statements
For the fi nancial year ended 31 December 2011
2. Summary of signifi cant accounting policies (contd.)
2.11 Intangible assets (contd.)
(b) Other intangible assets (contd.)
2.12 Subsidiaries
Intangible assets with indefi nite useful lives or not yet available for use are tested for impairment
annually, or more frequently if the events and circumstances indicate that the carrying value may
be impaired either individually or at the cash-generating unit level. Such intangible assets are not
amortised. The useful life of an intangible asset with an indefi nite useful life is reviewed annually
to determine whether the useful life assessment continues to be supportable. If not, the change in
useful life from indefi nite to fi nite is made on a prospective basis.
Gains or losses arising from derecognition of an intangible asset are measured as the difference
between the net disposal proceeds and the carrying amount of the asset and are recognised in profi t
or loss when the asset is derecognised.
(i) Research and development costs
Cahya Mata Sarawak Berhad
Research costs are expensed as incurred. Deferred development costs arising from
development expenditures on an individual project are recognised when the Group can
demonstrate the technical feasibility of completing the intangible asset so that it will be
available for use or sale, its intention to complete and its ability to use or sell the asset, how the
asset will generate future economic benefi ts, the availability of resources to complete and the
ability to measure reliably the expenditures during development. Deferred development costs
considered to have fi nite useful lives are amortised over the commercial lives of the underlying
products on a straight-line basis not exceeding ten years.
(ii) Computer software
The useful life of computer software is amortised on a straight-line basis over the estimated
economic useful life of three to ten years.
A subsidiary is an entity over which the Group has the power to govern the fi nancial and operating policies
so as to obtain benefi ts from its activities.
In the Company’s separate fi nancial statements, investments in subsidiaries are accounted for at cost less
impairment losses.
2.13 Associates
An associate is an entity, not being a subsidiary or a joint venture, in which the Group has signifi cant
infl uence. An associate is equity accounted for from the date the Group obtains signifi cant infl uence until
the date the Group ceases to have signifi cant infl uence over the associate.
The Group’s investments in associates are accounted for using the equity method. Under the equity
method, the investments in associates are measured in the statement of fi nancial position at cost plus postacquisition
changes in the Group’s share of net assets of the associates. Goodwill relating to associates is
included in the carrying amount of the investments. Any excess of the Group’s share of the net fair value
of the associate’s identifi able assets, liabilities and contingent liabilities over the cost of the investments
are excluded from the carrying amount of the investments and are instead included as income in the
determination of the Group’s share of the associate’s profi t or loss for the period in which the investments
are acquired.