76
GHL Systems Berhad
(293040-D)
NOTES TO THE FINANCIAL STATEMENTS
31 December 2014 (continued)
4. SIGNIFICANT ACCOUNTING POLICIES (continued)
4.7 Intangible assets (continued)
(b) Other intangible assets
(continued)
Intangible assets are initially measured at cost. The cost of intangible assets recognised in a
business combination is their fair values as at the date of acquisition.
After initial recognition, intangible assets are carried at cost less any accumulated amortisation
and any accumulated impairment losses. The useful lives of intangible assets are assessed to be
either finite or indefinite. Intangible assets with finite lives are amortised on a straight line basis
over the estimated economic useful lives and are assessed for any indication that the asset
could be impaired. If any such indication exists, the entity shall estimate the recoverable amount
of the asset. The amortisation period and the amortisation method for an intangible asset with
a finite useful life are reviewed at least at the end of each reporting period. The amortisation
expense on intangible assets with finite lives is recognised in profit or loss and is included within
the other operating expenses line item.
An intangible asset has an indefinite useful life when based on the analysis of all the relevant
factors, there is no foreseeable limit to the period over which the asset is expected to generate net
cash inflows to the Group. Intangible assets with indefinite useful lives are tested for impairment
annually and wherever there is an indication that the carrying amount may be impaired. Such
intangible assets are not amortised. Their useful lives are reviewed at the end of each reporting
period to determine whether events and circumstances continue to support the indefinite useful
life assessment for the asset. If they do not, the change in the useful life assessment from indefinite
to finite is accounted for as a change in accounting estimate in accordance with MFRS 108
Accounting Policies, Changes in Accounting Estimates and Errors
.
Expenditure on an intangible item that is initially recognised as an expense is not recognised as
part of the cost of an intangible asset at a later date.
An intangible asset is derecognised on disposal or when no future economic benefits are
expected from its use. The gain or loss arising from the derecognition determined as the
difference between the net disposal proceeds, if any, and the carrying amount of the asset is
recognised in profit or loss when the asset is derecognised.
Research and development
Expenditure on development activities of internally developed products is recognised as an
intangible asset when it relates to the production of new or substantively improved products
and processes and when the Group can demonstrate that it is technically feasible to develop
the product or processes, adequate resources are available to complete the development
and that there is an intention to complete and sell the product or processes to generate future
economic benefits.
Capitalised development costs are amortised on a straight line basis over a period of five (5) to
ten (10) years. Development expenditure not satisfying the criteria mentioned and expenditure
arising from research or from the research phase of internal projects are recognised in profit or
loss as incurred.
Development assets are tested for impairment annually.
