Asia Media Annual Report 2017

ASIA MEDIA GROUP BERHAD Annual Report 2017 102 4. Property, Plant and Equipment (cont’d) (a) Change in estimate During the financial year, the Group conducted a review of the useful live of broadcast centre network and SMS gateway (“Broadcast System”). In view of the renewal of the Broadcasting license become more certain in the current financial year, hence, the remaining useful life of the Broadcast System are expected to extend from 4 years as at 31 December 2016 to 9 years as at 31 December 2017. The effect of above change on depreciation expense, recognised in administrative expenses, in the current and future period is as follows: 2021 and 2017 2018 2019 2020 After RM RM RM RM RM Increase/ (Decrease) in depreciation expense - Administrative expenses (2,434,544) (2,426,966) (2,387,117) (2,387,117) 9,635,742 (b) Impairment losses During the current financial year, Asia Media Sdn. Bhd., a subsidiary company carried out a review of the recoverable amounts licensing rights (Note 5), broadcasting centre, network and SMS gateway (“Broadcasting Infrastructure”). Broadcasting Infrastructure was classified as one cash-generating unit (“CGU”) and tested for impairment. Following the review of projected cash flows, the Combined CGU is expected to generate sufficient cash flows in the next nine (9) years. Based on the projected cash flows, the Combined CGU is able to generate a value in use of RM17,382,000 (2016: RM16,248,700) in which the recoverable amount was in excess than its carrying amount. Therefore, there was no impairment loss recognised in the current financial year. An impairment loss of RM33,031 (Note 5) and RM2,806,005 was recognised in the previous financial year as the carrying amount was in excess than its recoverable amount. NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2017 (cont’d)