Acquisitions prior to 1 Januar y 2008 Negative goodwill represents the amount recognised under the Group’s previous accounting policy under which negative goodwill was stated at cost. Negative goodwill carried in the financial statements as at 31 December 2007 is recognised in full in the beginning balance of retained earnings as at 1 January 2008. Negative goodwill occurring on acquisitions of subsidiaries after 1 January 2000, the effective date of TAS 43: Business Combinations is classified under assets and is presented as a deduction from other assets in the balance sheet. As this negative goodwill does not relate to future losses or expenses, this negative goodwill, not exceeding the fair values of the non-monetary assets acquired, is recognised in the income statement on a straight-line method over the remaining weighted average useful life of the depreciable assets. Negative goodwill occurring on acquisitions of subsidiaries before 1 January 2000 represents the excess of fair value of land over the cost of acquisition and is presented under shareholders’ equity in the balance sheet. This is negative goodwill which occurred before the effective date of TAS 43: Business Combinations. The Group chose not to restate the financial statements on adoption of TAS 43. However, if the Group had made a retroactive adjustment, the retained earnings would have increased by the same amount as the negative goodwill.
Acquisitions on or af ter 1 Januar y 2008 Goodwill and negative goodwill is stated at cost. Negative goodwill is recognised immediately in the statement of income. Subsequent measurement Goodwill is measured at cost less impairment losses. In respect of equity accounted investments, the carrying amount of goodwill is included in the carrying amount of the investment. Assets usage right Assets usage rights that are acquired by the Group are stated at cost less accumulated amortisation and impairment losses. Amor tisation Amortisation is recognised in the statement of income on a straight-line basis over the estimated useful lives of intangible assets, from the date that they are available for use. The estimated useful lives are as follows: Assets usage rights
10 and 28 years
(k) Impairment The carrying amounts of the Group’s assets are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the assets recoverable amounts are estimated. An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. The impairment loss is recognised in the statement of income. When a decline in the fair value of an available-for-sale financial asset has been recognised directly in equity and there is objective evidence that the value of the asset is impaired, the cumulative loss that had been recognised directly in equity is recognised in the statement of income even though the financial asset has not been derecognised. The amount of the cumulative loss that is recognised in the statement of income is the difference between the acquisition cost and current fair value, less any impairment loss on that financial asset previously recognised in the statement of income.
Calculation of recoverable amount The recoverable amount of the Group’s investments in held-to-maturity securities is calculated as the present value of estimated future cash flows, discounted at the original effective interest rate. The recoverable amount of available-for-sale financial assets is calculated by reference to the fair value. The recoverable amount of non-financial assets is the greater of the assets’ net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For an asset that does not generate cash inflows largely independent of those from other assets, the recoverable amount is determined for the cash-generating unit to which the asset belongs.
Reversals of impairment An impairment loss in respect of a financial asset is reversed if the subsequent increase in recoverable amount can be related objectively to an event occurring after the impairment loss was recognised. For financial assets carried at amortised cost and available-for-sale financial assets that are debt securities, the reversal is recognised in the statement of income. For Available-for-sale financial assets that are equity securities, the reversal is recognised directly in equity.