2. Summary of significant accounting policies (cont’d)
2.11 Intangible assets (cont’d)
(b) Other intangible assets (cont’d)
The amortisation expense on intangible assets with finite useful lives is recognised
in profit or loss in the expense category consistent with the function of the intangible
assets. Except for order backlog, which is amortised based on the pattern in which
the asset’s future economic benefits are expected to be consumed, amortisation is
calculated on a straight-line basis over the estimated useful lives of intangible assets
as follows:
Patented technology
–
15 years
Customer relationships
–
25 years
Brand
–
5 years
Gains or losses arising from de-recognition 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 profit or loss when the asset is derecognised.
2.12 Lease prepayment
Leases of land under which the lessor has not transferred all the risks and rewards
incidental to ownership are classified as operating leases and the payments made on
acquiring the land-use right represent prepaid lease payments.
Lease prepayments for land-use right are initially measured at cost. Following initial
recognition, they are amortised on a straight-line basis over the term of the respective
lease.
2.13 Impairment of non-financial assets
The Group assesses at each reporting date whether there is an indication that an asset
may be impaired. If any indication exists, or when annual impairment testing for an asset
is required, the Group makes an estimate of the asset’s recoverable amount.
An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s fair
value less costs of disposal and its value in use and is determined for an individual asset,
unless the asset does not generate cash inflows that are largely independent of those
from other assets or groups of assets. Where the carrying amount of an asset or cash-
generating unit exceeds its recoverable amount, the asset is considered impaired and is
written down to its recoverable amount. In assessing value in use, the estimated future
cash flows expected to be generated by the asset are discounted to their present value
using a pre-tax discount rate that reflects current market assessments of the time value of
money and the risks specific to the asset. In determining fair value less cost of disposal,
recent market transactions are taken into account, if available. If no such transactions can
be identified, an appropriate valuation model is used.
NOTES TO THE FINANCIAL
STATEMENTS
For the financial year ended 30 June 2015
ASL Marine Holdings Ltd. /Annual Report 2015
85
