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Integrated Report 2016
ANNUAL FINANCIAL STATEMENTS
(continued)
The following useful lives have been estimated:
Freehold land
Not depreciated
Freehold buildings
– general purpose
40 years
– specialised
20 – 50 years
Leasehold improvements
The lease term or useful life, whichever is the shorter period
Plant, equipment and vehicles
3 – 15 years
Furniture and fittings
3 – 15 years
Computer equipment
3 years
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use. Any
gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of
the asset) is included in the statement of comprehensive income in profit or loss in the year the asset is derecognised.
GOODWILL AND INTANGIBLE ASSETS
GOODWILL
Goodwill is initially measured at cost, being the excess of the consideration transferred, the amount of any non-controlling interest and in a
business combination achieved in stages, the acquisition date fair value of any previously held equity interest in the acquiree, over the fair
value of the Group’s net identifiable assets acquired and liabilities assumed. If this consideration is lower than the fair value of the net assets
of the subsidiary acquired, the difference is recognised in profit or loss. Goodwill relating to subsidiaries is recognised as an asset and is
subsequently measured at cost less accumulated impairment losses.
Where goodwill forms part of a cash-generating unit and part of the operation within that unit is disposed of, the goodwill associated with
the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation.
Goodwill disposed of in this circumstance is measured based on the relative values of the operation disposed of and the portion of the cash-
generating unit retained.
INTANGIBLE ASSETS
Intangible assets acquired separately are measured on initial recognition at cost. The cost of an intangible asset acquired in a business
combination is the fair value at the date of acquisition. Subsequently, intangible assets are carried at cost less any accumulated amortisation
and accumulated impairment losses. Internally generated intangible assets, excluding capitalised development costs, are not capitalised and
expenditure is charged to the statement of comprehensive income in profit or loss in the year in which the expense is incurred.
The useful lives of intangible assets are either finite or indefinite.
Intangible assets with finite lives are amortised over their useful life and assessed for impairment when there is an indication that the asset may
be impaired. The amortisation period and the amortisation method are reviewed at each year-end. Changes in the expected useful life or the
expected pattern of consumption of future economic benefits embodied in the asset are accounted for by changing the amortisation period
or method, as appropriate, and are treated as changes in accounting estimates.
The following useful lives have been estimated:
Trademarks
15 years or indefinite
Customer, supplier and licence-related intangibles
1 – 15 years
Amortisation is recognised in the statement of comprehensive income in profit or loss in fixed and administrative expenses. Intangible assets
with indefinite useful lives are not amortised but are tested bi-annually for impairment. The useful lives are also reviewed in each period to
determine whether the indefinite life assessment continues to be supportable. If not, the change in the useful life assessment to a finite life
is accounted for prospectively.
Certain trademarks have been assessed to have indefinite useful lives, as presently there is no foreseeable limit to the period over which the
assets can be expected to generate cash flows for the Group.
An intangible asset is derecognised on disposal or when no future economic benefits are expected from its use or disposal.
Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the
carrying amount of the asset and are recognised in the statement of comprehensive income in profit or loss when the asset is derecognised.
ANNEXURE I – ACCOUNTING POLICIES
CONTINUED