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Annual Report 2016
ASIA MEDIA GROUP Berhad
77
Notes to the Financial Statements
(continued)
3.
Summary of significant accounting policies (cont’d)
3.4 Property, plant and equipment (cont’d)
Depreciation is computed on the straight-line basis over the estimated useful lives of the
assets, at the following annual rates:
Broadcast centre, network and SMS gateway
20%
Furniture and fittings
20%
Computer software
10%
Motor vehicles
20%
Office equipment
20%
Plant and machinery
10%
Renovation and signboard
10%
The carrying values of property, plant and equipment are reviewed for impairment when
events or changes in circumstances indicate that the carrying value may not be recoverable.
The residual value, useful life and depreciation method are reviewed at each financial year
end, and adjusted prospectively, if appropriate.
An item of property, plant and equipment is derecognised upon disposal or when no future
economic benefits are expected from its use or disposal. Any gain or loss on derecognition
of the asset is included in profit or loss in the year the asset is derecognised.
3.5 Impairment of non-financial assets
The Group and the Company assess at each reporting date whether there is an indication
that an asset may be impaired. If any such indication exists, or when an annual impairment
assessment for an asset is required, the Group or the Company makes an estimate of the
asset's recoverable amount.
For the purpose of assessing impairment, assets are grouped at the lowest levels for
which there are separately identifiable cash flows (CGU). An asset's recoverable amount
is the higher of an asset's fair value less costs to sell and its value-in-use. Where the
carrying amount of an asset exceeds its recoverable amount, the asset is written down to
its recoverable amount.
In assessing value-in-use, the estimated future cash flows expected to be generated by
the asset are discounted to their present value using a pre-tax discount rate that reflects
current market assessments of the time value of money and the risks specific to the
asset. In determining fair value less costs to sell, recent market transactions are taken
into account. If no such transactions can be identified, an appropriate valuation model is
used. These calculations are corroborated by valuation multiples, quoted share prices for
publicly traded companies or other available fair value indicators.