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Notes to the
financial statements
For the financial year ended 31 December 2018
83
A N N U A L R E P O R T
2 0 1 8
2.
Summary of significant accounting policies (cont’d)
2.9
Property, plant and equipment (cont’d)
Drydocking expenditure refers to major inspections and overhauls which are required at regular
intervals of 5 years over the useful life of the vessels to allow the continued use of the vessels.
When each major inspection and overhaul is performed, its cost is recognised in the carrying amount
of the vessels as a replacement if the following recognition criteria are met:
•
it is probable that future economic benefits associated with the asset will flow to the
entity; and
•
the cost of the asset to the entity can be measured reliably.
•
Any remaining carrying amount of the cost of the previous inspection is derecognised.
•
The estimated useful lives, residual values and depreciation method are reviewed at each
year end, with the effect of any changes in estimate accounted for on a prospective basis as
described in Note 3.
•
The gain or loss arising on disposal or retirement of an item of fixed assets is determined
as the difference between the sales proceeds and the carrying amount of the asset and is
recognised in profit or loss.
2.10
Intangible assets
Intangible assets acquired separately are measured initially at cost. Following initial acquisition,
intangible assets are carried at cost less any accumulated amortisation and any accumulated
impairment losses. Internally generated intangible assets, excluding capitalised development costs,
are not capitalised and expenditure is reflected in profit or loss in the year in which the expenditure
is incurred.
The useful lives of intangible assets are assessed as either finite or indefinite.
Intangible assets with finite useful lives are amortised over the estimated useful lives and assessed
for impairment whenever there is an indication that the intangible asset may be impaired. The
amortisation period and the amortisation method are reviewed at least at each financial year-end.
Changes in the expected useful life or the expected pattern of consumption of future economic
benefits embodied in the asset is accounted for by changing the amortisation period or method, as
appropriate, and are treated as changes in accounting estimates.
Intangible assets with indefinite useful lives or not yet available for use are tested for impairment
annually, or more frequently if the events and circumstances indicate that the carrying value may
be impaired either individually or at the cash-generating unit level. Such intangible assets are not
amortised. The useful life of an intangible asset with an indefinite useful life is reviewed annually
to determine whether the useful life assessment continues to be supportable. If not, the change in
useful life from indefinite to finite is made on a prospective basis.