Page 191 - FBL AR 2019-20

CORPORATE STATUTORY FINANCIAL
OVERVIEW STATEMENTS STATEMENTS

Notes to the Consolidated financial statements for the year ended March 31, 2020

(iv) how the asset will generate probable future economic benefits;
(v) the availability of adequate resources to complete the development and to use or sell the asset; and
(vi) the ability to measure reliably the expenditure attributable to the intangible asset during development.
The amount initially recognised for internally-generated intangible assets is the sum of expenditure incurred from the date when
the intangible assets first meets the recognition criteria listed above. Where no internally-generated intangible assets can be
recognised, development expenditure is recognised in the consolidated statement of profit and loss in the period in which incurred.
Subsequent to initial recognition, internally-generated intangible assets are reported at cost less accumulated amortisation and
accumulated impairment losses, on the same basis as intangible as intangible assets that are acquired separately.

The estimated useful lives of intangible assets are as follows:
Assets Estimated useful life (in years)
Computer software 3-6
Product know-how 3-5

(o) Impairment of tangible and intangible assets other than goodwill
At the end of each reporting period, the Group reviews the carrying amount of its tangible and intangible assets to determine whether
there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the
assets is estimated in order to determine the extent of impairment loss, if any. When it is not possible to estimate the recoverable amount
of an individual asset, the Group estimates the recoverable amount of the cash generating unit to which the assets belongs. When a
reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units,
or otherwise they are allocated to the smallest group of cash-generating units for a reasonable and consistent allocation basis to be
identified.
Impairment loss is recognised when the carrying amount of an asset exceeds its recoverable amount. Recoverable amount is determined:

(i) in the case of an individual asset, at the higher of the net selling price and the value in use; and
(ii) in the case of a cash generating unit (a Group of assets that generates identified, independent cash flows), at the higher of the cash
generating unit’s net selling price and the value in use.

[The amount of value in use is determined as the present value of estimated future cash flows from the continuing use of an asset and
from its disposal at the end of its useful life. For this purpose, the discount rate (pre-tax) is determined based on the weighted average
cost of capital of the Group suitably adjusted for risks specified to the estimated cash flows of the asset.]

For this purpose, a cash generating unit is ascertained as the smallest identifiable Group of assets that generates cash inflows that are
largely independent of the cash inflows from other assets or group of assets.
If recoverable amount of an asset (or a cash generating unit) is estimated to be less than its carrying amount, such deficit is recognised
immediately in the consolidated statement of profit and loss as impairment loss and the carrying amount of the asset (or cash generating
unit) is reduced to its recoverable amount.

When an impairment loss subsequently reverses, the carrying amount of the asset (or a cash generating unit) is increased to the revised
estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have
been determined had no impairment loss is recognised for the asset (or a cash generating unit) in prior years. A reversal of an impairment
loss is recognised immediately in the consolidated statement of profit and loss.
(p) Impairment of goodwill
Goodwill is tested for impairment annually and when circumstances indicate that the carrying value may be impaired. Impairment is
determined for goodwill by assessing the recoverable amount of each CGU (or group of CGUs) to which the goodwill relates. When the
recoverable amount of the CGU is less than its carrying amount, an impairment loss is recognised. Impairment losses relating to goodwill
cannot be reversed in future periods.
Any impairment loss for goodwill is recognised directly in profit or loss and is not reversed in subsequent periods.

On disposal of the relevant cash-generating unit, the attributable amount of goodwill is included in the determination of the profit or
loss on disposal.

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