Asia Media Annual Report 2017

ASIA MEDIA GROUP BERHAD Annual Report 2017 53 Key Audit Matters (cont’d) Key Audit Matters How we addressed the key audit matter Valuation of the Broadcast Infrastructure As at 31 December 2017, the carrying value of the Group’s broadcast infrastructure amounted to RM14,453,612. The valuation of broadcast infrastructure was identified as a key audit matter due to the significance of this balance to the financial statements, which represented 51% of the Group’s total assets as at 31 December 2017, as well as the significance of management’s judgement in determining their useful lives and impairment assessment. In considering the valuation of broadcast infrastructure, we focused on the assessment of residual value and useful lives of assets, and considered the impairment needed for the Group, as described below: (i) Assessment of the useful lives of broadcast infrastructure Management applies estimates and judgement in its determination of the useful lives of broadcasting infrastructure. Determination of the useful life is based on the period over which the broadcast infrastructure is expected to be available for use by the Group. During the financial year, the management revised the estimated useful lives of broadcast infrastructure from 5 years to 10 years. Our audit included the following procedures: (i) Assessment of the useful lives of broadcast infrastructure - We evaluated the assumption made by the management in determining the useful lives to ensure they are consistent with MFRS 116 Property, plant and equipment ; - We enquired the management to understand their rationale for changing the estimated useful lives and verified to supporting evidences; - We assessed the reasonableness of the useful lives by challenging management’s judgements through the comparison of the useful lives and external market data. INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS ASIA MEDIA GROUP BERHAD (cont’d)