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T H E S T R E N G T H O F O U R B R A N D S
2 .
Summa r y o f S i gn i f i c an t ac coun t i ng Po l i c i e s ( Con t ’ d )
goodwill
Goodwill is an asset representing the future economic benefits arising from other assets acquired in a business
combination that are not individually identified and separately recognised. Goodwill is recognised as of the acquisition
date measured as the excess of (a) over (b); (a) being the aggregate of: (i) the consideration transferred which generally
requires acquisition-date fair value; (ii) the amount of any non-controlling interest in the acquiree measured in
accordance with FRS 103 (measured either at fair value or as the non-controlling interest’s proportionate share of the
acquiree’s net identifiable assets); and (iii) in a business combination achieved in stages, the acquisition-date fair value
of the acquirer’s previously held equity interest in the acquiree; and (b) being the net of the acquisition-date amounts
of the identifiable assets acquired and the liabilities assumed measured in accordance with this FRS 103.
After initial recognition, goodwill acquired in a business combination is measured at cost less any accumulated
impairment losses. Goodwill is not amortised. Irrespective of whether there is any indication of impairment, goodwill
and also any intangible asset with an indefinite useful life or any intangible asset not yet available for use are tested for
impairment at least annually. Goodwill impairment is not reversed in any circumstances.
For the purpose of impairment testing and since the acquisition date of the business combination, goodwill is allocated
to each cash-generating unit, or groups of cash-generating units that are expected to benefit from the synergies of the
combination, irrespective of whether other assets or liabilities of the acquiree were assigned to those units or groups
of units. Each unit or group of units to which the goodwill is so allocated represents the lowest level within the entity
at which the goodwill is monitored for internal management purposes and is not larger than a segment.
impairment of non-Financial assets
Irrespective of whether there is any indication of impairment, an annual impairment test is performed at the same
time every year on an intangible asset with an indefinite useful life or an intangible asset not yet available for use.
The carrying amount of other non-financial assets is reviewed at the end of each reporting year for indications of
impairment and where an asset is impaired, it is written down through profit or loss to its estimated recoverable
amount. The impairment loss is the excess of the carrying amount over the recoverable amount and is recognised in
profit or loss. The recoverable amount of an asset or a cash-generating unit is the higher of its fair value less costs to
sell and its value in use. When the fair value less costs to sell method is used, any available recent market transactions
are taken into consideration. When the value in use method is adopted, in assessing the value in use, the estimated
future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks specific to the asset. For the purposes of assessing impairment,
assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units).
At the end of each reporting year non-financial assets other than goodwill with impairment loss recognised in prior
periods are assessed for possible reversal of the impairment. An impairment loss is reversed only to the extent that the
asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation
or amortisation, if no impairment loss had been recognised.
