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3.
Critical accounting estimates and judgments (cont’d.)
3.4 Impairment assessment of intangible assets
Goodwill, landing rights and other indefinite life intangibles are tested for impairment annually and at other times when such
indicators exist. This requires an estimation of the value in use of the cash generating units to which goodwill and landing rights
are allocated.
When value in use calculations are undertaken, management must estimate the expected future cash flows from the asset or
cash generating unit and choose a suitable discount rate in order to calculate the present value of those cash flows. Further
details of the carrying value, the key assumptions applied in the impairment assessment of goodwill and landing rights and
sensitivity analysis to changes in the assumptions are given in Note 16.
3.5 Impairment of receivables
An impairment loss is recognised when there is objective evidence that a financial asset is impaired. Management specifically
reviews its receivables financial assets and analyses historical bad debts, customer concentrations, customer creditworthiness,
current economic trends and changes in the customer payment terms when making a judgement to evaluate the adequacy of
the allowance for impairment loss.
Where there is objective evidence of impairment, the amount and timing of future cash flows are estimated based on historical
loss experience for assets with similar credit risk characteristics. If the expectation is different from the estimation, such
difference will impact the carrying value of receivables. Details of receivables are disclosed in Note 18.
4.
Revenue and other income
(a) Revenue
Group
Company
2017
RM’000
2016
RM’000
2017
RM’000
2016
RM’000
Passenger seat sales
6,859,805
4,391,253
4,787,425
4,391,253
Baggage fees
925,424
568,134
664,233
568,134
Aircraft operating lease income
991,549
1,257,681
276,318
359,735
Surcharges and fees
35,733
32,761
34,086
32,761
Freight services
189,428
128,582
145,103
128,582
Other revenue
707,782
467,674
533,975
467,674
9,709,721 6,846,085 6,441,140
5,948,139
Other revenue includes assigned seat, cancellation, documentation and other fees, and the on-board sale of meals and
merchandise.
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AirAsia Berhad
REPORTS AND FINANCIAL STATEMENTS