| (l) | Intangible assets |
Intangible assets acquired separately are initially measured at cost in accordance with IAS 38 “Intangible Assets”. The cost of intangible assets acquired in a business combination is their fair value as at the date of acquisition. Internally generated intangible assets, excluding capitalized development costs, are not capitalized and the related expenditure is reflected in the Consolidated Statement of Comprehensive Income in the year in which the expenditure is incurred.
The useful lives of intangible assets are assessed as either finite or indefinite.
Intangible assets with finite lives are amortized over their useful economic lives and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortization period and the amortization method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period. Changes in the expected useful life or in the expected pattern of consumption of future economic benefits embodied in the asset are accounted for by changing the amortization period or method, as appropriate, and are treated as changes in accounting estimates. The amortization expense on intangible assets with finite lives is recognized in the Consolidated Statement of Comprehensive Income within depreciation and amortization.
Intangible assets with indefinite useful lives are not amortized, but are tested for impairment annually, either individually or at the cash–generating unit level. The assessment of indefinite life is reviewed annually to determine whether the indefinite life continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis.
Gains and losses arising from the 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 recognized in the Consolidated Statement of Comprehensive Income when the asset is derecognized.
Goodwill is measured initially at cost, represented by the excess of the sum of the consideration transferred and the amount recognized for the non-controlling interest, with respect to the net of the identifiable assets acquired and the liabilities assumed. If this consideration is less than the fair value of the net assets acquired, the difference is recognized as a gain at the date of acquisition.
After initial recognition, Goodwill is measured at cost less any accumulated impairment loss. For the purpose of impairment tests, Goodwill acquired in a business combination is assigned, from the date of acquisition, to each of the Company’s cash generating units that are expected to benefit from the combination, regardless of whether other assets or liabilities of the acquired entity are allocated to those units.
When the Goodwill is part of a cash generating unit, and part of the operation within that unit is sold, the Goodwill associated with the sold operation is included in the carrying amount of the operation at the time of determining the gain or loss for this disposal. The Goodwill that is derecognized in this circumstance is assigned proportionally on the basis of the relative values of the sale transaction and the retained portion of the cash generating unit.
The
Company’s intangible assets include the following:
| (i) | Software |
Acquired computer software licenses are capitalized on the basis of cost incurred to acquire, implement and bring the software into use. Costs associated with maintaining computer software programs are expensed as incurred. In case of development or improvement to systems that will generate probable future economic benefits, the Company capitalizes software development costs, including directly attributable expenditures on materials, labor, and other direct costs.
Acquired software cost is amortized on a straight-line basis over its useful life.
Licenses
and software rights acquired by the Company have finite useful lives and are amortized on a straight–line basis over the
term of the contract. Amortization expense is recognized in the Consolidated Statement of Comprehensive Income.
| (ii) | Routes and trademarks |
Routes
and trademarks are carried at cost, less any accumulated amortization and impairment. The useful life of intangible assets associated
with routes and trademark rights are based on management’s assumptions of estimated future economic benefits. The intangible
assets are amortized over their useful lives of between two and thirteen years. Certain routes and trademarks have indefinite
useful lives and therefore are not amortized, but tested for impairment at least at the end of each reporting period. The assessment
of indefinite life is reviewed annually to determine whether the indefinite life continues to be supportable. If not, the change
in useful life from indefinite to finite is made on a prospective basis.
| (iii) | Contract–based intangible assets |
The useful life of intangible assets associated with contract rights and obligations is based on the term of the contract and are carried at cost, less accumulated amortization and related impairment.