3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(continued)
3.4 Intangible assets
(continued)
Goodwill
Goodwill that arises upon the acquisition of subsidiaries is included in intangible assets and represents the excess of:
• the fair value of the consideration transferred; plus
• the recognised amount of any non-controlling interests in the acquiree; plus
• if the business combination is achieved in stages, the fair value of the existing equity interest in the acquiree,
over the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed. When the
excess is negative, a bargain purchase gain is recognised immediately in income statement.
Goodwill is measured at cost less accumulated impairment losses and is subjected to testing for impairment, as described in
note 3.9.
Other intangible assets
Other intangible assets comprise computer software which is stated at cost less accumulated amortisation and impairment
losses.
Costs associated with maintaining software programmes are recognised 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 Company are
recognised as intangible assets.
Amortisation is charged to the income statement over their estimated useful lives on a straight-line basis commencing from
the date the asset is available for use.
The estimated useful lives of computer software are 2 to 5 years.
3.5 Inventories
Inventories, including consignment stocks held for sales at convenience stores, are stated at the lower of cost and net realisable
value. Cost is determined on the first-in-first-out basis or specified identification method.
Net realisable value is the estimated selling price in the ordinary course of business less estimated costs of completion and
estimated costs necessary to make the sale.
When inventories are sold, the carrying amount of those inventories is recognised as an expense in the period in which the
related revenue is recognised. The amount of any allowance for write-down of inventories to net realisable value and all losses
of inventories are recognised as an expense in the period the write-down or loss occurs. The amount of any reversal of any
allowance for write-down of inventories, arising from an increase in net realisable value, is recognised as a reduction in the
amount of inventories recognised as an expense in the period in which the reversal occurs.
68
TELECHOICE INTERNATIONAL LIMITED
2015 ANNUAL REPORT
NOTES TO THE
FINANCIAL STATEMENTS
