Maxis Berhad | Annual Report 2013

Maxis Berhad | Annual Report 2013 90 3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (d) Intangible assets The Group acquires 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. (i) Spectrum rights The Group’s spectrum rights consist of telecommunications licences with allocated spectrum rights which were acquired as part of a business combination and other spectrum rights. Spectrum rights that are considered to have an indefinite economic useful life are not amortised but tested for impairment on an annual basis, and where an indication of impairment exists. Spectrum rights that are considered to have a finite life are amortised on a straight line basis over the period of expected benefit and assessed at each reporting date whether there is any indication of impairment exists. See accounting policy Note 3(g)(i) on impairment of non-financial assets. The estimated useful lives of the spectrum rights of the Group are as follows: Telecommunications licences with allocated spectrum rights Indefinite life Other spectrum rights 4 years 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 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. Goodwill is measured at cost less any accumulated impairment losses. Negative goodwill is recognised immediately in the statement of profit or loss. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold. Goodwill is allocated to CGUs for the purpose of impairment testing and is tested annually for impairment or more frequently if events or changes in circumstances indicate that it might be impaired. See accounting policy Note 3(g)(i) on impairment of non-financial assets. Each CGU or a group of CGUs represents the lowest level within the Group at which goodwill is monitored for internal management purposes and which is expected to benefit from the synergies of the combination. (iii) Customer acquisition costs Expenditures incurred in providing the customer a free or subsidised device including installation costs, provided the customer signs a non-cancellable contract for a predetermined contractual period of one to two years, are capitalised as intangible assets and amortised over the contractual period on a straight line method. Customer acquisition costs are assessed at each reporting date whether there is any indication that the customer acquisition costs may be impaired. See accounting policy Note 3(g)(i) on impairment of non-financial assets. NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2013 Continued