Home' Annual Report : Annual Report 2016 Contents J. IMPAIRMENT OF INTANGIBLES
AND OTHER TANGIBLE ASSETS
At each repor ting date, the Consolidated Entity reviews
the carrying amounts of its intangible and other tangible
assets to determine whether there is any indication that
those assets have suf fered an impairment loss. If any
such indication exists, the recoverable amount of the
asset is estimated in order to determine the ex tent of the
impairment loss (if any). Where the asset does not generate
cash flows that are independent from other assets,
the Consolidated Entity estimates the recoverable amount
of the cash-generating unit to which the asset belongs.
Where a reasonable and consistent basis of allocation can
be identified, corporate assets are also allocated to individual
cash-generating units, or otherwise they are allocated to
the smallest group of cash-generating units for which a
reasonable and consistent allocation basis can be identified.
Recoverable amount is the higher of fair value less cost s to
sell and value in use. In assessing value in use, the estimated
future cash flows are discounted to their present value
using a pre-tax discount rate that reflect s current market
assessments of the time value of money and the risks
specific to the asset for which the estimates of future cash
flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating
unit) is estimated to be less than its carrying amount, the
carrying amount of the asset (cash-generating unit) is
reduced to its recoverable amount. An impairment loss is
recognised in profit or loss immediately, unless the relevant
asset is carried at fair value, in which case the impairment
loss is treated as a revaluation decrease.
Where an impairment loss subsequently reverses, the carrying
amount of the asset (cash-generating unit) is increased to the
revised estimate of its recoverable amount, but only to the
extent that the increased carr ying amount does not exceed
the carrying amount that would have been determined had
no impairment loss been recognised for the asset (cash-
generating unit) in prior years. A reversal of an impairment loss
is recognised in profit or loss immediately, unless the relevant
asset is carried at fair value, in which case the reversal of the
impairment loss is treated as a revaluation increase.
K. INTANGIBLE ASSETS
Intangible assets with finite lives that are acquired separately
are carried at cost less accumulated amortisation and
accumulated impairment loss. Amortisation is recognised on
a straight-line basis over their estimated useful lives as follows:
Core business systems
The estimated useful life and amortisation method are
reviewed at the end of each repor ting period, with the
ef fect of any changes in estimate being accounted for
on a prospective basis.
L. LEASED ASSETS
Leases, where substantially all the risks and benefits
incidental to the ownership of the asset, but not the legal
ownership, are transferred to the company are classified as
finance leases. Finance leases are capitalised. Assets and
liabilities are recorded at the present values of the minimum
lease payments, including any guaranteed residual values at
date of inception.
Lease payment s for operating leases, where substantially all
the risks and benefits remain with the lesser, are charged as
expenses in the periods in which they are incurred.
In the event that lease incentives are received to enter into
operating leases, such incentives are recognised as a liability.
The aggregate benefits of incentives are recognised as a
reduc tion of rental expense on a straight line basis, except
where another systematic basis is more representative of
the time pattern in which economic benefits from the leased
asset are consumed.
M. INVESTMENTS AND FINANCIAL ASSETS
Investments in controlled entities are carried at lower of
cost and net recoverable amount in the parent company’s
individual financial statements.
Held to maturity investments
Investments such as bonds and term deposits that are
intended to be held to maturity are initially measured at fair
value less cost and are subsequently measured at amortised
cost using the effective interest method. The effective
interest rate method is a method of calculating amor tised
cost of a financial asset and of allocating interest income
over the relevant period.
Financial Instruments such as non-derivative financial
assets available-for-sale are recorded at fair value through
comprehensive income. Revaluation is accumulated in an
investment revaluation reserve in equity.
All financial assets are recognised and derecognised on
trade date where the purchase or sale of a financial asset
is under a contrac t whose terms require deliver y of the
financial asset within the timeframe established by the
market concerned, and are initially measured at fair value,
plus transac tion cost s, except for those financial assets
classified as at fair value through comprehensive income,
which are initially measured at fair value.
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