Maxis Berhad | Annual Report 2012

Maxis Berhad // Annual Report 2012 109 FINANCIAL STATEMENTS CORPORATE GOVERNANCE ANALYSIS OF SHAREHOLDINGS OTHER INFORMATION ANNUAL GENERAL MEETING 3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (c) Property, plant and equipment (continued) All property, plant and equipment are depreciated on the straight line method to write off the cost of each category of assets to its residual value over its estimated useful life, summarised as follows: Buildings 42 – 50 years Telecommunications equipment 2 – 20 years Submarine cables (included within telecommunications equipment) 10 – 25 years Site decommissioning works (included within telecommunications equipment) 15 years Motor vehicles 5 years Office furniture, fittings and equipment 3 – 7 years Capital work-in-progress comprising mainly telecommunications equipment, submarine cables and renovations are not depreciated until they are ready for their intended use. Residual values and useful lives are reassessed and adjusted, if appropriate, at each reporting date. At each reporting date, the Group assesses whether there is any impairment. Where an indication of impairment exists, the carrying amount of the asset is assessed and written down immediately to its recoverable amount. See accounting policy Note 3(g)(i) on impairment of non-financial assets. Gains and losses on disposals are determined by comparing proceeds with carrying amounts and are included in the income statement. (d) Intangible assets (i) Acquired telecommunications licences with allocated spectrum rights The Group acquires other intangible assets either as part of a business combination or through separate acquisition. Intangible assets acquired in a business combination are recorded at their fair value at the date of acquisition and recognised separately from goodwill. On initial acquisition, management judgment is applied to determine the appropriate allocation of purchase consideration to the assets being acquired, including goodwill and identifiable intangible assets. Intangible assets that are considered to have a finite life are amortised on a straight line basis over the period of expected benefit. Intangible assets that are considered to have an indefinite economic useful life are not amortised but tested for impairment in accordance with Note 3(g)(i) on an annual basis, or where an indication of impairment exists. The acquired intangible assets include telecommunications licences with allocated spectrum rights which have indefinite economic useful life. Management assesses the indefinite economic useful life assumption applied to the acquired intangible assets annually. (ii) Goodwill Goodwill arises on the acquisition of subsidiaries and it represents the excess of the fair value of the consideration transferred for purchase of subsidiaries or businesses, the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any previously held equity interest in the acquiree over the fair value of the net identifiable assets acquired at the date of acquisition. Goodwill is measured at cost less any accumulated impairment losses. Negative goodwill is recognised immediately in the income statement. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.