52
TEHO INTERNATIONAL INC LTD.
Annual Report 2016
NOTES
TO THE FINANCIAL STATEMENTS
Year ended 30 June 2016
3 SIGNIFICANTACCOUNTING POLICIES (CONT’D)
3.5 Intangible assets and goodwill (cont’d)
(i)
Goodwill (cont’d)
Subsequent measurement
Goodwill is measured at cost less accumulated impairment losses. In respect of
associates, the carrying amount of goodwill is included in the carrying amount of the
investment, and an impairment loss on such an investment is not allocated to any
asset, including goodwill, that forms part of the carrying amount of the associates.
(ii) Other intangible assets
Other intangible assets that are acquired by the Group and have finite useful lives
are measured at cost less accumulated amortisation and accumulated impairment
losses.
(iii) Subsequent expenditure
Subsequent expenditure is capitalised onlywhen it increases the future economic
benefits embodied in the specific asset to which it relates. All other expenditure,
including expenditure on internally generated goodwill and brands, is recognised
in profit or loss as incurred.
(iv) Amortisation
Amortisation is calculated based on the cost of the asset, less its residual value.
Amortisation is recognised in profit or loss on a straight-line basis over the
estimated useful lives of intangible assets, other than goodwill, from the date
that they are available for use. The estimated useful lives for the current and
comparative years are as follows:
Customer relationships – 5 years
Orderbook
– Based on fulfilment of actual orders
3 SIGNIFICANTACCOUNTING POLICIES (CONT’D)
3.5 Intangible assets and goodwill (cont’d)
(iv) Amortisation (cont’d)
Amortisation methods, useful lives and residual values are reviewed at the end of
each reporting period and adjusted if appropriate.
3.6 Investment property
Investment property is property held to earn rental income, but not for sale in the
ordinary course of business, use in the production or supply of goods or services or
for administrative purposes. Investment property is stated at cost less accumulated
depreciation and any accumulated impairment losses, if any.
Cost includes expenditure that is directly attributable to the acquisition of the
investment property.
Any gain or loss on disposal of an investment property (calculated as the difference
between the net proceeds from disposal and the carrying amount of the item) is
recognised in profit or loss.
Depreciation is charged so as to write off the cost of the leasehold building over the
term of lease of 5 years.
The estimated useful life and depreciation method are reviewed at each year end, with
the effect of any changes in estimate accounted for on a prospective basis.
3.7 Leased assets
Leases in terms of which the Group assumes substantially all the risks and rewards of
ownership are classified as finance leases. Upon initial recognition, the leased asset is
measured at an amount equal to the lower of its fair value and the present value of the
minimum lease payments. Subsequent to initial recognition, the asset is accounted for
in accordance with the accounting policy applicable to that asset.
