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Asia Media Group Berhad
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Annual Report 2015
Notes to the Financial Statements
(continued)
pg.
90
4. Significant accounting judgements, estimates and assumptions
(cont’d)
(b) Impairment and useful lives of property, plant and equipment
Property, plant and equipment are tested for impairment at each reporting date. This
requires an estimation of the recoverable amounts of the CGU which the property, plant
and equipment are allocated.
When value-in-use calculations are undertaken, management must estimate the expected
future cash flows from the asset or CGU and choose a suitable discount rate in order to
calculate the present value of those cash flows. Changes to the assumptions used by
management such as utilisation rate, revenue growth, expected future cash flows and
discount rate used mat impact recoverable amounts of property, plant and equipment.
The Group estimates the useful lives of property, plant and equipment based on the period
over which the assets are expected to be available for use. The estimated useful lives of
property, plant and equipment are reviewed periodically and are updated if expectations
differ from previous estimates due to physical wear and year, technical or commercial
obsolescence and legal or other limits on the use of the relevant assets. In addition, the
estimation of the useful lives of property, plant and equipment are based on internal technical
evaluation and experience with similar assets. It is possible, however, that future results
of operations could be materially affected by changes in the estimates brought about by
changes in factors mentioned above. The amount and timing of recorded expenses for any
period would be affected by changes in these factors and circumstances. A reduction in the
estimated useful lives of the property, plant and equipment would increase the recorded
expenses and decreases the non-current assets.
As refer to Note 5 and Note 17 to the financial statements, further details of the key
assumptions applied in the impairment assessment of property, plant and equipment are
disclosed and as a result, an impairment loss of RM75,125,572 (2014: RM7,608,560) has
been provided.