Blue Label Telecoms Integrated Annual Report 2014

BUSINESS MODEL

AND STRATEGIC

OBJECTIVES

LEADERSHIP

GOVERNANCE

OPERATING

PERFORMANCE

SHAREHOLDERS’

INFORMATION AND

ADMINISTRATION

FINANCIAL

PERFORMANCE

BLUE LABEL INTEGRATED ANNUAL REPORT 2014

129

NOTES TO THE GROUP ANNUAL FINANCIAL STATEMENTS

CONTINUED

For the year ended 31 May 2014

SIGNIFICANT ACCOUNTING POLICIES (continued)

Intangible assets (continued)

(b) Trademarks

Trademarks are shown at historical cost. Trademarks have a finite useful life and are subsequently carried at

cost less accumulated amortisation. Amortisation is calculated using the straight-line method to allocate the

cost of trademarks over their estimated useful lives (10 years).

Trademarks are initially shown at fair value as determined in accordance with IFRS 3 –

Business Combinations

and are subsequently carried at the initially determined fair value less accumulated amortisation and

impairment losses.

(c)

Franchise fees

Franchise fees are shown at historical cost. Franchise fees have a finite useful life and are subsequently

carried at cost less accumulated amortisation. Amortisation is calculated using the straight-line method

to allocate the cost of franchise fees over their estimated useful lives (20 years).

Franchise fees are initially shown at fair value as determined in accordance with IFRS 3 –

Business

Combination

s, and are subsequently carried at the initially determined fair value less accumulated

amortisation and impairment losses.

(d) Databases, customer listings, distribution agreements and customer relationships

Databases, customer listings, distribution agreements and customer relationships acquired through business

combinations are initially shown at fair value as determined in accordance with IFRS 3 –

Business

Combinations

, and are subsequently carried at the initially determined fair value less accumulated

amortisation and impairment losses. Amortisation is calculated using the straight-line method to allocate the

value of these assets over their estimated useful lives (three to 10 years).

Distribution agreements purchased are initially shown at cost, and are subsequently carried at the initial cost

less accumulated amortisation and impairment losses. Amortisation is calculated using the straight-line

method to allocate the value of these assets over their estimated useful lives (10 years).

(e) Research and development

Costs incurred on development projects are recognised as intangible assets when the following criteria

are fulfilled:

•

It is technically feasible to complete the intangible asset and that it will be available for use or sale;

•

Management intends to complete the intangible asset and use or sell it;

•

There is an ability to use or sell the intangible asset;

•

It can be demonstrated how the intangible asset will generate probable future economic benefits;

•

Adequate technical, financial and other resources to complete the development and to use or sell the

intangible asset are available; and

•

The expenditure attributable to the intangible asset during its development can be reliably measured.