Page 154 - China Mobile Limited - Annual Report 2012

China Mobile Limited
Annual Report 2012
148
Notes to the Financial Statements
(Expressed in Renminbi unless otherwise indicated)
40 Non-Adjusting Post Balance Sheet Events
After the balance sheet date the directors declared a final dividend for the year ended 31 December 2012. Further
details are disclosed in note 36(b)(i).
On 23 August 2012, CMC, a wholly-owned subsidiary of the Company, entered into a share subscription agreement (“the
Agreement”) with ANHUI USTC IFLYTEK Co., Ltd. (“Anhui USTC”). Pursuant to the Agreement, CMC has conditionally
agreed to subscribe for and Anhui USTC has conditionally agreed to issue 70,273,935 ordinary shares at a total
consideration and direct costs of RMB1,363,000,000. Upon completion with the terms in the Agreement, the
Company will, through CMC, hold 15% equity interests in Anhui USTC. Anhui USTC’s shares are traded in The
Shenzhen Stock Exchange, the PRC. The transaction was approved by China Securities Regulatory Commission on 4
February 2013.
41 Ultimate Holding Company
The directors consider the ultimate holding company as at 31 December 2012 to be CMCC, a company incorporated
in the PRC.
42 Accounting Estimates and Judgements
Key sources of estimation uncertainty
Notes 16 and 38 contain information about the assumptions and their risk factors relating to goodwill impairment and
financial instruments. Other key sources of estimation uncertainty are as follows:
Impairment loss for doubtful accounts
The Group assesses impairment loss for doubtful accounts based upon evaluation of the recoverability of the accounts
receivable and other receivables at each balance sheet date. The estimates are based on the aging of the accounts
receivable and other receivables balances and the historical write-off experience, net of recoveries. If the financial
condition of the customers were to deteriorate, additional impairment may be required.
Depreciation
Depreciation is calculated to write off the cost of items of property, plant and equipment, less their estimated residual
value, if any, using the straight-line method over their estimated useful lives. The Group reviews the estimated useful
lives and residual values of the assets annually in order to determine the amount of depreciation expense to be
recorded during any reporting period. The useful lives and residual values are based on the Group’s historical
experience with similar assets and take into account anticipated technological changes. The depreciation expense for
future periods is adjusted if there are significant changes from previous estimates.