3.
SIGNIFICANT ACCOUNTING POLICIES (CONT'D)
3.4
Intangible Assets (cont’d)
The amortisation period and method are reviewed at the end of each reporting period to ensure that
the expected useful lives of the assets are consistent with previous estimates and the expected pattern
of consumption of the future economic benefits embodied in the items of intangible assets.
Computer software
The cost of computer software licences are capitalised as an intangible asset. Costs include their
purchase prices and any directly attributable costs of preparing the assets for their intended use. These
costs are amortised on a straight line basis over the period the asset is expected to generate economic
benefits.
Cost associated with developing computer software programs that will generate probable future
economic benefits from the use thereof are recognised as intangible assets. Costs comprised all
directly attributable development costs including an appropriate portion of relevant overheads.
Computer software development cost is amortised when the asset is available for use over the period
the asset is expected to generate economic benefits.
3.5
Impairment of Non-Financial Assets
The Group and the Company assess at the end of each reporting period whether there is an indication
that an asset may be impaired. For the purpose of impairment testing, recoverable amount (i.e. the
higher of the fair value less cost to sell and value-in-use) is determined on an individual asset basis
unless the asset does not generate cash flows that are largely independent of those from other assets.
If this is the case, the recoverable amount is determined for the cash-generating units (“CGU”) to
which the asset belongs.
If the recoverable amount of the asset (or CGU) is estimated to be less than its carrying amount, the
carrying amount of the asset (or CGU) is reduced to its recoverable amount.
The difference between the carrying amount and recoverable amount is recognised as an impairment
loss in the profit or loss except for assets that were previously revalued where the revaluation surplus
was taken to other comprehensive income. In this case the impairment loss is also recognised in other
comprehensive income up to the amount of any previous revaluation surplus.
An impairment loss for an asset is reversed if, and only if, there has been a change in the estimates
used to determine the asset’s recoverable amount since the last impairment loss was recognised. The
carrying amount of this asset is increased to its revised recoverable amount, provided that this amount
does not exceed the carrying amount that would have been determined (net of any accumulated
amortisation or depreciation) had no impairment loss been recognised for the asset in prior years. A
reversal of impairment loss for an asset is recognised in profit or loss unless the asset is measured at
revalued amount, in which case the reversal is treated as a revaluation increase.
3.6
Inventories
Inventories are stated at the lower of cost and net realisable value.
Costs of all inventories are determined on the first-in, first-out basis.
The cost of inventories includes expenditure incurred in acquiring the inventories and other costs
incurred in bringing them to their existing location and condition. In the case of finished goods and
work-in-progress, cost includes direct labour and attributable production overheads.
Net realisable value is the estimated selling price in the ordinary course of business less the estimated
costs of completion and the estimated costs necessary to make the sale.
NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2014 (CONT’D)
Pentamaster Corporation Berhad
(572307-U)
•
Annual Report 2014
52
