271 / 396
2.
Summary of significant accounting policies (cont’d.)
2.6 Intangible assets (cont’d.)
2.6.2 Other intangible assets (cont’d.)
Gains or losses arising fromderecognition of an intangible asset are measured as the difference between the net disposal
proceeds and the carrying amount of the asset and are recognised in profit or loss when the asset is derecognised.
(i) Research and development – internally developed software
Research expenditure is recognised as an expense when incurred. Costs incurred on development projects (relating
to the design and testing of new or improved products) are recognised as intangible assets when the following
criteria are fulfilled:
• it is technically feasible to complete the intangible asset so that it will be available for use or sale;
• management intends to complete the intangible asset and use or sell it;
• there is an ability to use or sell the intangible asset;
• it can be demonstrated how the intangible asset will generate probable future economic benefits;
• adequate technical, financial and other resources to complete the development and to use or sell the intangible
asset are available; and,
• the expenditure attributable to the intangible asset during its development can be reliably measured.
Other development expenditures that do not meet these criteria are recognised as an expense when incurred.
Development costs previously recognised as an expense are not recognised as an asset in subsequent period.
Capitalised development costs recognised as intangible assets are amortised from the point at which the asset is
ready for use on a straight-line basis over its useful life.
(ii) Landing rights
Landing rights relate to traffic rights and landing slots for destinations operated by the Group’s airline operating
centres. These rights are expected to be renewed yearly, subject to minimum time performance, timely payment
by the airlines, as well as minimum 80% utilisation. As there is no evidence of non-renewal, the useful lives of the
landing rights are estimated to be indefinite. Management believes there is no foreseeable limit to the period over
which the landing rights are expected to generate net cash inflows for the Group.
2.7 Investments in subsidiaries, joint ventures and associates
In the Company’s separate financial statements, investments in subsidiaries, joint ventures and associates are stated at cost
less accumulated impairment losses.
Amounts due from associates of which the Company does not expect repayment in the foreseeable future are treated as part
of the parent’s net investment in associates. Where an indication of impairment exists, the carrying amount of the investment
is assessed and written down immediately to its recoverable amount (see Note 2.8). On disposal of investments in subsidiaries,
joint ventures and associates, the difference between disposal proceeds and the carrying amounts of the investments are
recognised in profit or loss.
[ ]
257
AirAsia Berhad
REPORTS AND FINANCIAL STATEMENTS