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GHL Systems Berhad
(293040-D)
Annual report 2015
Notes to the Financial Statements
31 December 2015 (continued)
4. SIGNIFICANT ACCOUNTING POLICIES (continued)
4.7 Intangible assets (continued)
(b) Other intangible assets (continued)
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 not exceeding
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.
4.8 Impairment of non-financial assets
The carrying amount of assets, except for financial assets (excluding investments in subsidiaries,
associates and joint ventures), inventories and deferred tax assets, are reviewed at the end of each
reporting period to determine whether there is any indication of impairment. If any such indication
exists, the asset’s recoverable amount is estimated.
Goodwill and intangible assets that have an indefinite useful life are tested annually for impairment
or more frequently if events or changes in circumstances indicate that the intangible asset might be
impaired.
The recoverable amount of an asset is estimated for an individual asset. Where it is not possible to
estimate the recoverable amount of the individual asset, the impairment test is carried out on the cash
generating unit (“CGU”) to which the asset belongs. Goodwill acquired in a business combination
is from the acquisition date, allocated to each of the CGU or groups of CGU of the Group that are
expected to benefit from the synergies of the combination giving rise to the goodwill irrespective of
whether other assets or liabilities of the acquiree are assigned to those units or groups of units.
Goodwill acquired in a business combination shall be tested for impairment as part of the impairment
testing of CGU to which it relates. The CGU to which goodwill is allocated shall represent the lowest
level within the Group at which the goodwill is monitored for internal management purposes and not
larger than an operating segment determined in accordance with MFRS 8
Operating Segments
.
The recoverable amount of an asset or CGU is the higher of its fair value less cost to sell and its value in
use.