2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.8
Intangible assets (continued)
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. 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 de-recognition 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)
Computer software
Acquired computer software licences are capitalised on the basis of the costs incurred
to acquire and bring to use the specific software. Direct expenditure, which enhances or
extends the performance of computer software beyond its specifications and which can be
reliably measured, is recognised as a capital improvement and added to the original cost of
the software. Costs associated with maintaining computer software are recognised as an
expense as incurred.
Computer software licences are stated at cost less accumulated amortisation and impairment
in value, if any. These costs are amortised using the straight line method over their estimated
useful lives of 5 years.
(b)
Club membership
Club membership was acquired separately and has an indefinite useful life.
2.9
Impairment of non-financial assets
The Group assesses at each reporting date whether there is an indication that an asset may be
impaired. If any indication exists, or when an annual impairment testing for an asset is required, the
Group makes an estimate of the asset’s recoverable amount.
An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s fair value less costs
of disposal and its value in use and is determined for an individual asset, unless the asset does not
generate cash inflows that are largely independent of those from other assets or groups of assets.
Where the carrying amount of an asset or cash-generating unit exceeds its recoverable amount, the
asset is considered impaired and is written down to its recoverable amount.
60
NOTES TO THE
FINANCIAL STATEMENTS
For the financial year ended 31 December 2015
HG METAL MANUFACTURING LIMITED
ANNUAL REPORT 2015
