Basic HTML Version
133
Financial
Statements
& Others
Gamuda Berhad (29579-T)
Annual Report 2013
2. Summary of significant accounting policies (cont’d.)
2.9 Intangible assets (cont’d.)
a. Goodwill (cont’d.)
Goodwill and fair value adjustments arising on the acquisition of foreign operation are treated as
assets and liabilities of the foreign operations and are recorded in the functional currency of the foreign
operations and translated in accordance with the accounting policy set out in Note 2.22.
b. Motorway development expenditure
Motorway development expenditure (“MDE”) is stated at cost less accumulated amortisation and
impairment losses. The policy for the recognition and measurement of impairment losses is in accordance
with Note 2.15. MDE comprises construction and attributable expenditure (including interest free and fee
charges relating to the financing of the construction and development of the motorway) incurred by the
Group in connection with the concesssion. Upon completion of the construction works of the motorway
and commencement of tolling operations, at each statement of financial position date, the cumulative
actual expenditure incurred is amortised to the income statement based on the following formula:
The projected total toll revenue of the concession for the remaining concession period is based on
the traffic volumes projected by an independent professional firm of the traffic consultants in a latest
available projection study commissioned by the Group, taking into account the toll rates as provided in
the concession agreement.
The effects of changes in the estimates are included in the amortisation for the year.
c. Other intangible assets
Other intangible assets of the Group comprise concession and quarry rights.
Other intangible assets acquired separately are measured initially at cost. The cost of other intangible
assets acquired in a business combination is their fair value as at the date of acquisition. Following
initial acquisition, other intangible assets are measured at cost less any accumulated amortisation and
accumulated impairment losses.
Other intangible assets with finite useful lives are amortised over the estimated useful lives and assessed
for impairment whenever there is an indication that the other intangible asset may be impaired. The
amortisation period and the amortisation method are reviewed at least at each financial year-end.
Changes in the expected useful life or the expected pattern of consumption of future economic benefits
embodied in the asset is accounted for by changing the amortisation period or method, as appropriate,
and are treated as changes in accounting estimates. The amortisation expense on other intangible
assets with finite lives is recognised in profit or loss.
Gains or losses arising from derecognition of an other intangible asset are measured as the difference
between the net disposal proceeds and the carrying amount of the asset and are recognised in profit or
loss when the asset is derecognised.
Cumulative Actual Toll Revenue to date
(Cummulative Actual Toll Revenue to date +
Projected Total Toll Revenue for the
remaining concession period)
Cummulative
Actual MDE
Less
Accumulated
amortisation at
beginning of the
financial year
X
Notes to the Financial Statements
31 July 2013