2. Summary of significant accounting policies (cont’d)
2.11 Intangible assets (cont’d)
(a) Goodwill (cont’d)
For the purpose of impairment testing, goodwill acquired in a business combination
is, from the acquisition date, allocated to each of the Group’s cash-generating units
that are expected to benefit from the synergies of the combination, irrespective of
whether other assets or liabilities of the acquiree are assigned to those units.
The cash-generating unit towhich goodwill has been allocated is tested for impairment
annually and whenever there is an indication that the cash-generating unit may
be impaired. Impairment is determined for goodwill by assessing the recoverable
amount of each cash-generating unit (or group of cash-generating units) to which
the goodwill relates. Where the recoverable amount of the cash-generating unit is
less than the carrying amount, an impairment loss is recognised in profit or loss.
Impairment losses recognised for goodwill are not reversed in subsequent periods.
Where goodwill forms part of a cash-generating unit and part of the operation
within that cash-generating unit is disposed of, the goodwill associated with the
operation disposed of is included in the carrying amount of the operation when
determining the gain or loss on disposal of the operation. Goodwill disposed of in
this circumstance is measured based on the relative fair values of the operations
disposed of and the portion of the cash-generating unit retained.
Goodwill and fair value adjustments arising on the acquisition of foreign operation
are treated as assets and liabilities of the foreign operations and are recorded in the
functional currency of the foreign operations and translated in accordance with the
accounting policy set out in Note 2.4.
(b) Other intangible assets
Other intangible assets consist of patented technology, customer relationships,
brand and order backlog.
Intangible assets acquired separately are measured initially at cost. The cost of
intangible assets acquired in a business combination is their fair value as at the
date of acquisition. Following initial acquisition, intangible assets are carried at
cost less any accumulated amortisation and any accumulated impairment losses.
Internally generated intangible assets, excluding capitalised development costs, are
not capitalised and expenditure is reflected in profit or loss in the year in which the
expenditure is incurred.
The useful lives of intangible assets are assessed as either finite or indefinite.
Intangible assets with finite useful lives are amortised over the estimated useful lives
and assessed for impairment whenever there is an indication that the intangible
asset may be impaired. The amortisation period and the amortisation method are
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 amortisation period or method, as
appropriate, and are treated as changes in accounting estimates.
NOTES TO THE FINANCIAL
STATEMENTS
For the financial year ended 30 June 2015
ASL Marine Holdings Ltd. /Annual Report 2015
84
