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2.
Summary of significant accounting policies (cont’d.)
2.5 Property, plant and equipment (cont’d.)
At the end of the reporting period, the Group assesses whether there is any indication of impairment. If such an indication exists,
an analysis is performed to assess whether the carrying amount of the asset is fully recoverable. A write down is made if the
carrying amount exceeds the recoverable amount. See accounting policy Note 2.8 on impairment of non-financial assets.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount and are included in profit or
loss.
Deposits on aircraft purchase are included as part of the cost of the aircraft and are depreciated from the date that aircraft is
ready for its intended use.
2.6 Intangible assets
2.6.1 Goodwill
Goodwill arises from a business combination and represents the excess of the aggregate of fair value of consideration
transferred, the amount of any non-controlling interest in the acquiree and the fair value of any previous equity interest
in the acquiree over the fair value of the net identifiable assets acquired and liabilities assumed on the acquisition date.
If the fair value of consideration transferred, the amount of non-controlling interest and the fair value of previously held
interest in the acquiree are less than the fair value of the net identifiable assets of the acquiree, the resulting gain is
recognised in profit or loss.
Goodwill is not amortised but it is tested for impairment annually ormore frequently if events or changes in circumstances
indicate that it might be impaired, and carried at cost less accumulated impairment losses. For the purpose of impairment
testing, goodwill acquired in a business combination is allocated to each of the cash generating units (“CGUs”), or
groups of CGUs, that is expected to benefit from the synergies of the combination. Each unit or group of units to which
the goodwill is allocated represents the lowest level within the entity at which the goodwill is monitored for internal
management purposes. Goodwill is monitored at operating segment level.
The carrying value of goodwill is compared to the recoverable amount, which is the higher of value in use and the fair
value less costs of disposal. Any impairment is recognised immediately as an expense and is not subsequently reversed.
2.6.2 Other intangible assets
Intangible assets acquired separately are measured initially at cost. The cost of intangible assets acquired in a business
combination is their fair value as at the date of acquisition. Following initial acquisition, intangible assets are measured
at cost less any accumulated amortisation and accumulated impairment losses.
Intangible assets with finite useful lives are amortised over the estimated useful lives and assessed for impairment
whenever there is an indication that the 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 intangible
assets with finite lives is recognised in profit or loss.
Intangible assets with indefinite useful lives or not yet available for use are tested for impairment annually, or more
frequently if the events and circumstances indicate that the carrying value may be impaired either individually or at
the cash generating unit level. Such intangible assets are not amortised. The useful life of an intangible asset with an
indefinite useful life is reviewed annually to determine whether the useful life assessment continues to be supportable.
If not, the change in useful life from indefinite to finite is made on a prospective basis.
NOTES TO THE
FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017
[ ]
AirAsia Berhad
REPORTS AND FINANCIAL STATEMENTS
256