development work. Expenses that are capitalised include the
costs of materials, direct wage costs and a share of the
directly attributable common expenses. Capitalised
development costs are recognised at their cost less
accumulated depreciation and accumulated impairment
losses. Depreciation of the asset begins when development is
complete and the asset is available for use. Capitalised
development costs are depreciated on a straight-line basis
over the period of expected future benefits. During the period
of development, the asset is tested for impairment annually.
Business combination and goodwill
Business combinations are accounted for using the acquisition
method. The cost of an acquisition is measured as the
aggregate of the consideration transferred, which is measured
at acquisition date, fair value, and the amount of any
non-controlling interests in the acquiree. For each business
combination, the Group elects whether to measure the
non-controlling interests in the acquiree at fair value or at the
proportionate share of the acquiree’s identifiable net assets.
Acquisition-related costs are expensed as incurred and
included in administrative expenses.
When the Group acquires a business, it assesses the financial
assets and liabilities assumed for appropriate classification
and designation in accordance with the contractual terms,
economic circumstances and pertinent conditions as at the
acquisition date. Goodwill is initially measured at cost (being
the excess of the aggregate of the consideration transferred
and the amount recognised for non-controlling interests and
any previous interest held over the net identifiable assets
acquired and liabilities assumed). If the fair value of the net
assets acquired is in excess of the aggregate consideration
transferred, the Group re-assesses whether it has correctly
identified all of the assets acquired and all of the liabilities
assumed and reviews the procedures used to measure the
amounts to be recognised at the acquisition date. If the
reassessment still results in an excess of the fair value of net
assets acquired over the aggregate consideration transferred,
then the gain is recognised in profit or loss.
After initial recognition, goodwill is measured at cost less any
accumulated impairment losses. For the purpose of
impairment testing, goodwill acquired in a business
combination is, from the acquisition date, allocated to each of
the Group’s cash-generating units that are expected to benefit
from the combination, irrespective of whether other assets or
liabilities of the acquiree are assigned to those units.
Goodwill is tested for impairment annually as at 31 December
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. The Group bases its
impairment calculation on detailed budgets and forecast
calculations, which are prepared separately for each of the
Group’s CGUs to which the individual assets are allocated.
These budgets and forecast calculations generally cover a
period of five years. A long-term growth rate is calculated and
applied to project future cash flows after the fifth year. 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.
Current versus non-current classification
An asset is classified as current when it is expected to be
realised or sold, or to be used in the Group's normal operating
cycle or falls due or is expected to be realised within 12
months after the end of the reporting period. Other assets are
classified as non-current. Liabilities are classified as current
when they are expected to be settled in the normal operating
cycle of the Group, are held for trading, are expected to be
settled within 12 months of the end of the reporting period, or
if the group does not have an unconditional right to postpone
settlement for at least 12 months after the reporting date.
Provisions for obligations and other liabilities are classified as
non-current.
Property, plant and equipment
Office machinery and operating equipment are measured at
cost less accumulated depreciation.
Where individual components of an item of property, plant and
equipment have different useful lives, they are depreciated
separately. Depreciation is provided on a straight-line basis
over the expected useful lives of the assets/components.
Depreciation on machinery and operating equipment is linear
over the expected useful lives of the assets based on the
following assessments of the expected useful lives of the
assets:
● Office machinery 3-5 years
● Operating equipment 3-5 years
Impairment of assets
The carrying amount of intangible assets and property, plant
and equipment alike is assessed annually for indications of
impairment.
Should indications of impairment occur, each asset or group of
assets, respectively, will be assessed in terms of impairment.
Assets are written down to the recoverable amount if this is
lower than the carrying amount. The highest value of the net
realisable value and the estimated value in use is used as the
recoverable amount.
The value in use is calculated as the present value of the
anticipated net income from the use of the asset or group of
assets.
Leases
The Group, as a lessee, assesses at contract inception whether
a contract is, or contains, a lease. That is, if the contract
conveys the right to control the use of an identified asset for a
period of time in exchange for consideration
The Group, as a lessee, applies a single recognition and
measurement approach for all leases, except for short-term
leases and leases of low-value assets. The Group, as a lessee,
recognises lease liabilities to make lease payments and
right-of-use assets representing the right to use the underlying
assets.
Right-of-use assets
The Group recognises right-of-use assets at the
commencement date of the lease (i.e., the date the underlying
asset is available for use). Right-of-use assets are measured at
cost, less any accumulated depreciation and impairment
losses, and adjusted for any remeasurement of lease liabilities.
The cost of right-of-use assets includes the amount of lease
liabilities recognised, initial direct costs incurred, and lease