notes to the financial statements
for the financial year ended 31 December 2014 (Continued)
2 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.12 Intangible assets
Intangible assets acquired separately are measured initially at cost. The cost of intangible assets acquired in a business combination is their fair value as at
the date of acquisition. Following initial acquisition, intangible assets are measured at cost less any accumulated amortisation and accumulated impairment
losses. Intangible assets with finite useful lives are amortised over the estimated useful lives and assessed for impairment whenever there is an indication
that the intangible asset may be impaired. See accounting policy 2.15 on impairment of non-financial assets. The amortisation period and the amortisation
method are reviewed at least at each financial year end. Changes in the expected useful life or the expected pattern of consumption of future economic benefits
embodied in the asset is accounted for by changing the amortisation period or method, as appropriate, and are treated as changes in accounting estimates. The
amortisation expense on intangible assets with finite lives is recognised in profit or loss.
Intangible assets with indefinite useful lives or not yet available for use are tested for impairment annually, or more frequently if the events and circumstances
indicate that the carrying value may be impaired either individually or at the cash-generating unit level. See accounting policy 2.15 on impairment of non-
financial assets. Such intangible assets are not amortised. The useful life of an intangible asset with an indefinite useful life is reviewed annually to determine
whether the useful life assessment continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis.
Gains or losses arising from derecognition 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.
(a)
Goodwill
Goodwill represents the excess of the cost of acquisition of subsidiaries, joint ventures and associates over the fair value of the Group’s share of the
identifiable net assets at the date of acquisition.
Goodwill on acquisition of subsidiaries is tested annually for impairment and carried at cost less accumulated impairment losses. Impairment losses
on goodwill are not reversed. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.
Goodwill on acquisition of subsidiaries is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to those
cash-generating units or groups of cash-generating units that are expected to benefit from the synergies of the business combination in which the
goodwill arose.
Goodwill on acquisitions of joint ventures and associates is included in the carrying amounts of investments in joint ventures and associates respectively.
Such goodwill is tested for impairment as part of the overall balance.
Where goodwill forms part of a cash-generating unit and part of the operation within that cash-generating unit is disposed of, the goodwill associated
with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation.
Goodwill disposed of in this circumstance is measured based on the relative fair values of the operations disposed of and the portion of the cash-
generating unit retained.
(b)
Intellectual property
Expenditure on acquired intellectual property is capitalised and amortised using the straight line method over their estimated useful life, not exceeding
a period of 20 years.
(c)
Trademarks
Separately acquired trademarks are shown at historical cost. Trademarks acquired in a business combination are recognised at fair value at the
acquisition date. Trademarks have an infinite useful life and are carried at cost less accumulated impairment.
(d)
Technical know-how
Separately acquired technical know-how are shown at historical costs. Technical know-how acquired in a business combination is recognised at
fair value at the acquisition date. Technical know-how has a finite useful life and are carried at cost less accumulated amortisation. Amortisation is
calculated using the straight line method to allocate the cost of technical know-how over its estimated useful lives of 5 years.
75
Wah Seong Corporation Berhad • Annual Report 2014
