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115
Maxis Berhad
Annual Report 2014
Notes to the
Financial Statements
31 December 2014
4 CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS
Estimates and judgments are continually evaluated by the Directors and are based on historical experience and other factors, including
expectations of future events that are believed to be reasonable under the circumstances.
Critical accounting estimates and assumptions
The Group and the Company make estimates and assumptions concerning the future. The resulting accounting estimates will, by
definition, rarely equal the related actual results. To enhance the information content of the estimates, certain key variables that are
anticipated to have material impact on the Group’s and the Company’s results and financial position are tested for sensitivity to changes
in the underlying parameters. The estimates and assumptions that have a significant risk of causing a material adjustment to the
carrying amounts of assets and liabilities within the next financial year are outlined below.
(a) Intangible assets
The telecommunications licences with allocated spectrum rights are not subject to amortisation and are tested annually for
impairment as the Directors are of the opinion that the licences can be renewed in perpetuity at negligible cost and the associated
spectrum rights, similar to land, have an indefinite economic useful life. Correspondingly, deferred tax has not been recognised.
The estimated economic useful life reflects the Group’s expectation of the period over which the Group will continue to recover
benefits from the licence.
The economic useful life is periodically reviewed, taking into consideration such factors as changes in technology and the regulatory
environment. See Note 16 to the financial statements for the key assumptions on the impairment assessment of intangible assets.
(b) Estimated useful lives and impairment assessment of property, plant and equipment
The Group reviews annually the estimated useful lives and assesses for indicators of impairment of property, plant and equipment
based on factors such as business plans and strategies, historical sector and industry trends, general market and economic
conditions, expected level of usage, future technological developments and other available information. It is possible that future
results of operations could be materially affected by changes in these estimates brought about by changes in the factors mentioned.
Any impairment or reduction in the estimated useful lives of property, plant and equipment would increase charges to the
statement of profit or loss and decrease their carrying value. A detailed impairment assessment was carried out for dedicated
telecommunications equipment during the financial year. See Note 15 to the financial statements for the impact of the changes in
the estimated useful lives and impairment of property, plant and equipment.
(c) Provisions for liabilities and charges
The Group recognises provisions for liabilities and charges when it has a present legal or constructive obligation arising as a
result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable
estimate can be made. The recording of provision requires the application of judgments about the ultimate resolution of these
obligations. As a result, provisions are reviewed at each reporting date and adjusted to reflect the Group’s current best estimate.
See Note 28 to the financial statements for the impact on change in estimate in relation to the provision for site rectification and
decommissioning works.
