axiata group berhad | annual report 2015
132
NOTES TO THE
FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2015
3.
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(b) Intangible assets (continued)
(ii) Licenses
The Group’s licenses are mainly consisting acquired telecommunication licences with allocated spectrum rights and tower operating license.
Acquired licenses are shown at cost. Licenses have finite useful lives and are carried at cost less accumulated amortisation. Amortisation
is calculated using straight-line method, from the effective date of commercialisation of services, subject to impairment, to the end of
the assignment period. Licenses are not revalued. The estimated useful lives of the acquired telecommunication licenses with allocated
spectrum rights and tower operating license of the Group are as follows:
Malaysia
10 years
Indonesia
5 – 10 years
Sri Lanka
5 – 10 years
Bangladesh
10 – 18 years
Cambodia
25 years
(iii) Subscriber acquisition costs
Subscriber acquisition costs incurred in providing the customer a free or subsidised handset, provided the customer signs a non-cancellable
contract for a predetermined contractual period, are amortised over the contractual period on a straight line method.
Subscriber acquisition costs are assessed at each reporting date whether there is any indication that the subscriber acquisition cost may
be impaired.
(iv) Customer contracts and the related relationship
Customer contracts and the related customer relationship arose from the acquisition of a subsidiary. The customer contracts and the
related relationships are shown at fair value on acquisition of a subsidiary and subsequently subject to amortisation over the useful life of 20
years. The customer contracts and the related customer relationships are tested for impairment whenever indication of impairment exists.
(c) Property, plant and equipment (“PPE”)
PPE are stated at cost less accumulated depreciation and impairment losses. Cost includes expenditure that is directly attributable to the
acquisition of the items.
(i) Cost
The cost of telecommunication network includes cost of equipment, site surveys, contractors’ charges, materials and related overhead.
The cost of other PPE comprises their purchase cost and any incidental cost of acquisition. These costs include the costs of dismantling,
removal and restoration, the obligation which was incurred as a consequence of installing the asset.
PPE also include telecommunication equipment and maintenance spares acquired for the purpose of replacing damaged or faulty plant or
spares and supplies to be used in constructing and maintaining the network.
Borrowing costs directly incurred to finance the construction of PPE that takes more than twelve (12) months are capitalised as part of the
cost of the assets during the period of time that is required to complete and prepare the qualified asset for its intended use.
Subsequent cost is included in the carrying amount of the asset or recognised as a separate asset, as appropriate, only when it is probable
that the future economic benefit associated with the item will flow to the Group and the Company and the cost of the item can be
measured reliably. The carrying value of the replaced part is derecognised. All other repairs and maintenance are recognised as expenses
in profit or loss during the period in which they are incurred.
