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FINANCIAL STATEMENTS
Axiata Group Berhad | Annual Report 2016
137
3.
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(b) Intangible assets (continued)
(v) Brands
Separately acquired brands are shown at historical cost. Brands acquired in a business combination are recognised at fair value at the
acquisition date. Brands have a finite useful life and are carried at cost less accumulated amortisation and accumulated losses, if any.
Amortisation is calculated using the straight line method to allocate the cost of brands over their estimated useful lives as below:
Indonesia
2 years
Nepal
10 years
Bangladesh
3 years
(c) Property, plant and equipment (“PPE”)
PPE are stated at cost less accumulated depreciation and impairment losses. Cost includes its purchase price and any costs that are directly
attributable to bringing to assets to the location and condition necessary for it to be capable of operating in the manner intended by
management.
(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.
(ii) Depreciation and residual value
Freehold land is not depreciated as it has an infinite life. Other PPE are depreciated on the straight-line method to allocate the cost of
the assets to their residual values over their estimated useful lives in years, as summarised below:
Leasehold land
3 - 99 years
Buildings
2 - 50 years
Telecommunication network equipment
2 - 20 years
Movable plant and equipment
1 - 10 years
Computer support systems
2 - 10 years
Depreciation on assets under construction or capital work-in-progress commence when the assets are ready for their intended use.
Depreciation on PPE ceases at the earlier of derecognition or classification as held-for-sale.
Residual values and useful lives of assets are reviewed, and adjusted if appropriate, at the end of each reporting period.
(iii) Impairment
At the end of the reporting period, the Group and the Company assess whether there is any indication of impairment. If such indication
exists, an analysis is performed to assess whether the carrying value of the asset is fully recoverable. A write down is made if the
carrying value exceeds the recoverable amount. See significant accounting policies Note 3(e) to the financial statements on impairment
of non-financial assets.