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Axiata Group Berhad | Annual Report 2016
FINANCIAL STATEMENTS
136
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2016
3.
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(b) Intangible assets (continued)
(i) Goodwill (continued)
For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the cash generating units
(“CGUs”), or groups of CGUs, that is expected to benefit from the synergies of the combination. Each unit or group of units to which the
goodwill is allocated represents the lowest level within the entity at which the goodwill is monitored for internal management purposes.
Goodwill is monitored at the operating segment level.
Goodwill is not amortised but it is tested for impairment annually or more frequently if events or changes in circumstances indicate that
it might be impaired, and carried at cost less accumulated impairment losses. For the purpose of impairment testing, goodwill acquired
in a business combination is allocated to each of the CGUs, or groups of CGUs, that is expected to benefit from the synergies of the
combination. Each unit or group of units to which the goodwill is allocated represents the lowest level within the entity at which the
goodwill is monitored for internal management purposes. The carrying value of goodwill is compared to the recoverable amount, which
is the higher of value in use and the fair value less costs of disposal. Any impairment is recognised immediately as an expense and is not
subsequently reversed.
(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
15 years
Indonesia
5 – 10 years
Sri Lanka
5 – 10 years
Bangladesh
15 – 18 years
Cambodia
25 - 30 years
Nepal
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.
The customer contracts and the related customer relationships are tested for impairment whenever indication of impairment exists.
Indonesia
4 years
Nepal
10 years
Bangladesh
2.5 years
Others
20 years