NATURAL COOL HOLDINGS LIMITED
Annual Report 2011
56
Notes to the Financial Statement
For the year ended 31st December 2011
3
Signifcant accounting policies (Continued)
3.5 Intangible assets (Continued)
(ii)
Computer software
Computer software licenses are initially recognised at cost which includes the purchase
price (net of any discounts and rebates) and other costs directly attributable to bringing the
assets to a working condition for their intended use. Direct expenditure, which enhances or
extends the performance of computer software beyond its specifcations and which can be
reliably measured, is recognised as a capital improvement and added to the original cost of
the software. Costs associated with maintaining the computer software are recognised as an
expense as incurred.
Computer software licenses are subsequently measured at cost less accumulated
amortisation and impairment losses.
Amortisation is recognised in proft or loss on a straight-line basis over the estimated useful
lives of 3 years from the date that they are available for use, since this most closely refects
the expected pattern of consumption of the future economic benefts embodied in the assets.
Amortisation methods, useful lives and residual values are reviewed at each reporting period
and adjusted if appropriate.
(iii)
Industrial certificates
Industrial certifcates represent costs incurred by the Group to obtain Association of Short
Circuit Testing Authority (ASTA) certifcates for developed capabilities to design, construct and
develop low-voltage switchboards to meet international standards. Amortisation is recognised
in proft or loss on a straight-line basis over the estimated useful life of 25 years, from the
date that they are available for use, since this most closely refects the expected pattern of
consumption of the future economic benefts embodied in the assets.
Amortisation methods and useful lives are reviewed at each reporting date and adjusted if
appropriate.
(iv)
Customer contracts
Customer contracts acquired in a business combination are recognised at fair value at the
acquisition date. The customer contracts have a fnite useful life and are measured at cost
less accumulated amortisation. Amortisation is calculated using the straight-line method over
the period during which the income from the related contracts is earned.
(v)
Subsequent expenditure
Subsequent expenditure is capitalised only when it increases the future economic benefts
embodied in the specifc asset to which it relates. All other expenditure, including expenditure
on internally generated goodwill and brands, is recognised in proft or loss as incurred.