| (m) | Intangible assets |
| (i) | Telecommunication licenses |
Separately acquired telecommunication licenses are stated at historical cost adjusted for the effects of inflation during the hyperinflationary period, where applicable, less amortization and impairment losses.
Amortization
Amortization is recognized in the statement of profit or loss on a straight-line basis by reference to the license period. The useful lives for telecommunication licenses are as follows:
| Telecommunications licenses | 3 – 25 years |
| (ii) | Computer software |
Acquired computer software licenses are capitalized on the basis of the costs incurred to acquire and bring to use the specific software.
Costs associated with maintaining computer software programmes are recognized as an expense as incurred.
Development costs that are directly attributable to the design and testing of identifiable and unique software products controlled by the group are recognised as intangible assets when the following criteria are met:
| • | it is technically feasible to complete the software so that it will be available for use |
| • | management intends to complete the software and use or sell it |
| • | there is an ability to use or sell the software |
| • | it can be demonstrated how the software will generate probable future economic benefits |
| • | adequate technical, financial and other resources to complete the development and to use or sell the software are available, and |
| • | the expenditure attributable to the software during its development can be reliably measured. |
Directly attributable costs that are capitalized as part of the software include employee costs and an appropriate portion of relevant overheads.
Research expenditure and development expenditure that do not meet the criteria above are recognized as an expense as incurred. Development costs previously recognized as an expense are not recognized as an asset in a subsequent period.
Capitalized development costs are recorded as intangible assets and amortized from the point at which the asset is ready for use.
Amortization
Amortization is recognized in the statement of profit or loss on a straight-line basis over the estimated useful lives. The useful lives for computer software are as follows:
|
Computer software |
3 – 8 years |
| (iii) | Other intangible assets |
Other intangible assets that are acquired by the Group which have finite useful lives are stated at historical cost adjusted for the effects of inflation during the hyperinflationary period, where applicable, less amortization and impairment losses. Indefeasible Rights of Use (“IRU”) are rights to use a portion of an asset’s capacity granted for a fixed period of time. IRUs are recognized as intangible asset when the Group has specific indefeasible rights to use an identified portion of an underlying asset and the duration of the right is for the major part of the underlying asset’s useful economic life. IRUs are amortized over the shorter of the underlying asset’s useful economic life and the contract term.
Amortization
The Group amortizes intangible assets with a limited useful life using the straight-line method over the following periods:
|
Transmission line software |
5 – 10 years | |
|
Central betting system operating right |
7 – 10 years | |
|
Customer base |
2 – 15 years | |
|
Brand name |
9 – 10 years | |
|
Indefeasible right of use |
15 years |
Amortization methods, useful lives and residual values are reviewed, and adjusted if appropriate, at the end of each reporting period.
Goodwill
Goodwill on acquisitions of subsidiaries is included in intangible assets. Goodwill is not amortized but it is tested for impairment annually, or more frequently if events or changes in circumstances indicate that it might be impaired, and is carried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.
Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to those cash-generating units or groups of cash-generating units that are expected to benefit from the business combination in which the goodwill arose. The units or groups of units are identified at the lowest level at which goodwill is monitored for internal management purposes, being the operating segments.