notes to tHe financial statements

for tHe financial year enDeD 31 December 2008 (continued)

4

critical accoUntinG estimates anD JUDGements

(continued)

4.2 Critical accounting estimates and assumptions (continued)

The main risks relating to the Group's business are as follows:

­ Increasing competition in the countries the Group operates in

­ Difficulties in commencing/expanding business in certain emerging markets

­ Political and social developments in the region the Group operates in

­ Worldwide economic downturn

­

Significant expansion of capital investments required

­

Difficulties in developing new products and services at competitive prices

To enhance the information content of the estimates, certain key variables that are anticipated to have material

impact to the Group's results and nancial position are tested for sensitivity to changes in the underlying

parameters. The estimates and assumptions that have a signi cant risk of causing a material adjustment to the

carrying amounts of assets and liabilities within the next year are mentioned below.

(i) Impairment of Goodwill

The Group tests goodwill for impairment annually in accordance with its accounting policy and whenever

events or change in circumstances indicate that this is necessary within the financial year.

The assumptions used, results and sensitivity of the impairment assessment are disclosed in Note 20 to

the financial statements.

(ii) Impairment of Property, Plant and Equipment, Intangible Assets (other than goodwill) and

Investments

The Group assesses impairment of the assets mentioned above whenever the events or changes in

circumstances indicate that the carrying amount of an asset may not be recoverable i.e. the carrying

amount of the asset is more than the recoverable amount. Recoverable amount is measured at the higher

of the fair value less cost to sell for that asset and its value-in-use.

Projected future cash flows used in impairment testing of the assets mentioned above are based on

Group's estimates calculated based on historical, sector and industry trends, general market and economic

conditions, changes in technology and other available information.

The assumptions used, results and sensitivity of the impairment assessments of investments in subsidiaries,

a joint controlled entity, associates and long term investments are disclosed in Notes 24, 25, 26 and 27 to

the financial statements respectively.

(iii) Estimated Useful Lives of Property, Plant and Equipment

The Group reviews annually the estimated useful lives of property, plant and equipment based on factors

such as business plan and strategies, expected level of usage and future technological developments.

Future results of operations could be materially affected by changes in these estimates brought about by

changes in the factors mentioned. A reduction in the estimated useful lives of property, plant and equipment

would increase the recorded depreciation and decrease the property, plant and equipment.

The impact of the review of the useful lives of property, plant and equipment is disclosed in Note 21 to

the financial statements.

Axiata Group Berhad

Annual Report 2008

188

(formerly known as TM International Berhad)