Page 102 - OneVue Annual Report 2015

Notes to the financial statements

Note 41. Critical estimates, judgement and errors (continued)

Pre-contract costs

Pre-contract costs are costs incurred in relation to securing a contract. These include costs incurred prior to and
during the contract bidding process as well as costs incurred upon set-up and mobilisation of a contract upon
award. They are capitalised in intangible assets in the statement of financial position when there is a probable
expectation that they will be recovered and that they can be reliably measured. They are amortised on a straight
line basis over the shorter of the period of the contract or five years. Where a contract award is subsequently
unsuccessful, any capitalised costs are immediately expensed to profit or loss as other expenses.

Capitalisation of development costs

OneVue capitalises project development costs eligible for capitalisation. The capitalised costs are all directly
attributable costs necessary to create, produce, and prepare the asset to be capable of operating in the manner
intended. OneVue amortises the capitalised project costs over the project’s useful life.

Provision for impairment of receivables

The provision for impairment of receivables assessment requires a degree of estimation and judgement. The level
of provision is assessed by taking into account the recent sales experience, the ageing of receivables, historical
collection rates and specific knowledge of the individual debtors’ financial position.

Estimation of useful lives of assets

OneVue determines the estimated useful lives and related depreciation and amortisation charges for its property,
plant and equipment and finite life intangible assets. The useful lives could change significantly as a result of
technical innovations or some other event. The depreciation and amortisation charge will increase where the useful
lives are less than previously estimated lives, or technically obsolete or non-strategic assets that have been
abandoned or sold will be written off or written down.

Impairment of non-financial assets other than goodwill and other indefinite life intangible assets

OneVue assesses impairment of non-financial assets other than goodwill and other indefinite life intangible assets
at each reporting date by evaluating conditions specific to OneVue and to the particular asset that may lead to
impairment. If an impairment trigger exists, the recoverable amount of the asset is determined. This involves fair
value less costs to sell or value-in-use calculations, which incorporate a number of key estimates and assumptions.

Long service leave provision

The liability for long service leave is recognised and measured at the present value of the estimated future cash
flows to be made in respect of all employees at the reporting date. In determining the present value of the liability,
estimates of attrition rates and pay increases through promotion and inflation have been taken into account.

Share-based payment transactions

OneVue measures the cost of equity-settled transactions with employees by reference to the fair value of the
equity instruments at the date at which they are granted. The fair value is determined by using either the Binomial
or Black-Scholes model taking into account the terms and conditions upon which the instruments were granted.
The accounting estimates and assumptions relating to equity-settled share-based payments would have no impact
on the carrying amounts of assets and liabilities within the next annual reporting period but may impact profit or
loss and equity.

102 - ONEVUE ANNUAL REPORT 2015