Goodwill is recognized when the purchase price exceeds the fair value of identifiable net assets acquired in a business combination. Goodwill is measured at cost less accumulated impairment losses.
Investor-level goodwill is included in the carrying amounts of the equity investments. The impairment losses for the goodwill within the equity-accounted investees are accounted for as deductions of carrying amounts of investments in equity-accounted investees.
| | (2) | Research and development |
During the research phase, activities are carried out to obtain and understand new scientific or technical knowledge. Expenditures during this phase are recognized in profit or loss as incurred.
Expenditure arising from development is capitalized as an intangible asset when the Company demonstrates all of the following:
| | (i) | the technical feasibility of completing the intangible asset so that it will be available for use or sale; |
| | (ii) | its intention to complete the intangible asset and use or sell it; |
| | (iii) | its ability to use or sell the intangible asset; |
| | (iv) | the probability that the intangible asset will generate probable future economic benefits; |
| | (v) | the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and |
| | (vi) | its ability to measure reliably the expenditure attributable to the intangible asset during its development. |
Development expenditure which fails to meet the criteria for recognition as an intangible asset is reflected in profit or loss when incurred. Capitalized development expenditure is measured at cost less accumulated amortization and any accumulated impairment losses.
| | (3) | Other intangible assets |
Other intangible assets acquired are measured at cost less accumulated amortization and any accumulated impairment losses.
| | (4) | Subsequent expenditure |
Subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure, including expenditure on internally generated goodwill and brands, is recognized in profit or loss as incurred.
The depreciable amount of an intangible asset is the cost less its residual value. Other than goodwill and intangible assets with indefinite useful life, an intangible asset with a finite useful life is amortized over 3 to 20 years using the straight-line method from the date that the asset is made available for use. The amortization charge is recognized in profit or loss.
The residual value, amortization period, and amortization method are reviewed at least annually at each annual reporting date, and any changes therein are accounted for as changes in accounting estimates.
