AnnuAl REPORT 2011-2012 - Sbs

Depreciation and amortisation rates applying to each class of depreciable asset are based on the following useful lives:
CLAss oF NoN FINANCIAL Asset 2011-2012 AVG 2010-2011 AVG
Buildings 40 years 40 40 years 40
Leasehold improvements Lease term 15 Lease term 15
Plant and equipment 3 to 20 years 7 3 to 20 years 7
Intangibles (excluding goodwill and trademark) 5 to 7 years 6 5 to 7 years 6
The aggregate amount of depreciation allocated for each
class of asset during the reporting period is disclosed in
Note 3(c).
Leasehold improvements are amortised on a straight line
basis over the shorter of either the unexpired period of the
lease or the estimated useful life of the improvements.
Intangible assets (computer software and contract rights)
are amortised on a straight line basis over their estimated
useful lives. Goodwill and trademark are not amortised,
but tested for impairment.
(t) Impairment of non-current assets
All assets are reviewed for impairment as at 30 June 2012.
Where impairment testing is required (e.g. goodwill) or
indications of impairment exist, the asset’s recoverable
amount is estimated, and an impairment adjustment
made if the asset’s recoverable amount is less than its
carrying amount. The recoverable amount is the higher of
its fair value less costs to sell and its “value in use”. “Value
in use” is assessed as the “depreciated replacement cost”
if the future economic benefit of the asset is not primarily
dependent on the asset’s ability to generate cash flows,
and the asset would be replaced by the Corporation
if deprived of the asset. For the purposes of goodwill
impairment testing, a “cash-generating unit” (CGU),
comprising the smallest group of assets to which goodwill
can be allocated, is identified and tested for impairment
as a group – see Note 8(c).
In 2012, after writing off a number of assets identified as
obsolete and/or disposed, no indicators of impairment
were found for the remaining Corporation’s assets (at fair
value or at cost) – see Note 3(e).
(u) program inventory
Program costs are capitalised as inventory and amortised
over time to reflect their expected usage:
Program acquisitions
Program acquisitions are generally amortised on a straight
line basis over the shorter of three years or licence period
(for movies), or over the shorter period of two years or
licence period (for documentaries and other overseas
purchased programs).
Commissioned programs
Commissioned programs are valued at cost, and generally
amortised on a straight line basis over the shorter of four
years or licence period.
Some programs are fully amortised in the current period.
All internally produced news and current affairs programs,
as well as sports events, are expensed immediately at the
time of broadcast.
(v) Investment in associates
The Corporation’s investments in its associates are
accounted for using the equity method.
Under the equity method, investments in the associates
are carried in the Corporation’s balance sheet at cost as
adjusted for post-acquisition charges in the Corporation’s
share of net assets of the associates. Goodwill relating
to an associate is included in the carrying amount of the
investment. After the application of the equity method,
the Corporation determines whether it is necessary to
recognise any impairment loss with respect to the net
investment in associates.
Further details relating to its associate company, Freeview
Australia Ltd, are provided in Note 7(d)(ii).
AnnuAl RepoRt 2011 – 2012 85