Page 97 - OneVue Annual Report 2015

Notes to the financial statements

Note 40. Summary of significant accounting policies (continued)

derecognised upon disposal or when there is no future economic benefit to OneVue. Gains and losses between the
carrying amount and the disposal proceeds are taken to profit or loss. Any revaluation surplus reserve relating to
the item disposed of is transferred directly to retained profits.

Intangible assets
Intangible assets acquired as part of a business combination, other than goodwill, are initially measured at their fair
value at the date of the acquisition. Intangible assets acquired separately are initially recognised at cost. Intangible
assets are subsequently measured at cost less amortisation and any impairment. The gains or losses recognised in
profit or loss arising from the derecognition of intangible assets are measured as the difference between net
disposal proceeds and the carrying amount of the intangible asset. The method and useful lives of finite life
intangibles are reviewed annually. Changes in the expected pattern of consumption or useful life are accounted for
prospectively by changing the amortisation method or period.

Goodwill

Goodwill arises on the acquisition of a business. Goodwill is not amortised. Instead, goodwill is tested annually for
impairment, or more frequently if events or changes in circumstances indicate that it might be impaired, and is
carried at cost less accumulated impairment losses. Impairment losses on goodwill are taken to profit or loss and
are not subsequently reversed.

Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to
those cash-generating units or groups of cash-generating units that are expected to benefit from the business
combination in which the goodwill arose. The units or groups of units are identified at the lowest level at which
goodwill is monitored for internal management purposes, being the operating segments (note 4).

Research and development

Research costs are expensed in the period in which they are incurred. Development costs are capitalised when it is
probable that the project will be a success considering its commercial and technical feasibility; OneVue is able to
use or sell the asset; OneVue has sufficient resources; and intent to complete the development and its costs can be
measured reliably. Capitalised development costs are amortised on a straight-line basis over the period of their
expected benefit, being their finite life of between 5 to 7 years.

Customer relationships

Customer relationships acquired as part of a business combination are recognised separately from goodwill. The
customer relationships are carried at their fair value at the date of acquisition less accumulated amortisation and
impairment losses. Amortisation is calculated based on the timing of projected cash flows of the contracts over
their estimated useful lives, which is considered to be between 3 and 7 years.

Software

Costs associated with maintaining software programmes are recognised as an expense as incurred. Development
costs that are directly attributable to the design and testing of identifiable and unique software products controlled
by OneVue are recognised as intangible assets when the following criteria are met:

• it is technically feasible to complete the software so that it will be available for use
• management intends to complete the software and use or sell it
• there is an ability to use or sell the software
• it can be demonstrated how the software will generate probable future economic benefits
• adequate technical, financial and other resources to complete the development and to use or sell

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