Page 125 - ar2010

Subsequent expenditure is capitalised to the asset’s carrying amount only when it is probable that future economic benefts

associated with the expenditure will fow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance costs are expensed when incurred. When part of an investment property is replaced, the carrying amount of the replaced part is derecognised.

Changes in fair values are recognised in proft or loss. Investment properties are derecognised either when they have been

disposed of or when the investment property is permanently withdrawn from use and no future economic beneft is expected from its disposal.

Where the Group disposes of a property at fair value in an arm’s length transaction, the carrying value immediately prior to

the sale is adjusted to the transaction price, and the adjustment is recorded in proft or loss as a net gain/loss from fair value adjustment on investment property.

Goodwill represents the excess of the cost of acquisition of subsidiaries and associates over the fair value of the Group’s share

of the identifable net assets at the date of acquisition.

Goodwill on acquisition of subsidiaries is included in intangible assets. Goodwill is tested annually for impairment and is carried

at cost less accumulated impairment losses. Impairment losses on goodwill are not reversed. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.

Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to those cash-

generating units or groups of cash-generating units that are expected to beneft from the synergies of the business combination in which the goodwill arose, identifed according to operating segment. See accounting policy Note 4(f) on impairment of non-fnancial assets.

Goodwill on acquisition of associates is included in investments in associates. Such goodwill is tested for impairment as part of

the overall balance.

Assets that have an indefnite useful life are not subject to amortisation and are tested annually for impairment. Assets that are

subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Impairment loss is recognised for the amount by which the carrying amount of the asset exceeds its recoverable amount. The recoverable amount is the higher of an asset’s net selling price and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there is separately identifable cash fows (cash-generating units). Non-fnancial assets other than goodwill that suffered an impairment are reviewed for possible reversal of the impairment at each reporting date.

The impairment loss is charged to the proft or loss unless it reverses a previous revaluation in which case it is charged to

the revaluation surplus. Impairment losses on goodwill are not reversed. In respect of other assets, any subsequent increase in recoverable amount is recognised in proft or loss unless it reverses an impairment loss on a revalued asset in which case it is taken to revaluation reserve.

Non-current assets (or disposal groups) are classifed as assets held for sale and stated at the lower of carrying amount and

fair value less cost to sell if their carrying amount is recovered principally through a sale transaction rather than through a continuing use and a sale is considered highly probable

Cost is determined principally on the weighted average method. Net realisable value is the estimated selling price in the ordinary

course of business, less the applicable variable selling expenses.