NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

The amount represents the costs incurred in acquiring licences at certain holiday units in Sussex Inlet, Fingal Bay and Urunga.

Poker machine entitlements are considered to be intangible assets with an indefinite life as there is no set term for holding the entitlements. As a result the entitlements are not subject to amortisation. Instead, poker machine entitlements are tested for impairment annually and are carried at cost less accumulated impairment losses. Poker machine entitlements are not considered to have an active market, hence the fair value is calculated using the value in use method based on management’s 5 year forecasts.

Licences held by the company are considered to be intangible assets with an indefinite life as there is no set term to the contractual agreement. As a result the licences are not subject to amortisation. Instead the licences are tested for impairment annually and are carried at cost less accumulated impairment losses.

Impairment of poker machine entitlements and licenses to occupy holiday units is recognised based on a value in use calculation and is measured at the present value of the estimated future cash inflows available to the company from the use of these licenses. In determining the present value of the cash inflows, assumptions regarding growth rates and appropriate discount factors have been applied to the cash flows.