Page 90 - China Mobile Limited - Annual Report 2012

China Mobile Limited
Annual Report 2012
84
Notes to the Financial Statements
(Expressed in Renminbi unless otherwise indicated)
1 Significant Accounting Policies (Continued)
(e) Goodwill
Goodwill represents the excess of:
(i) the aggregate of the fair value of the consideration transferred, the amount of any non-controlling interest in
the acquiree and the fair value of the Group’s previously held equity interest in the acquiree; over
(ii) the net fair value of the acquiree’s identifiable assets and liabilities measured as at the acquisition date.
When (ii) is greater than (i), then this excess is recognized immediately in profit or loss as a gain on a bargain
purchase.
Goodwill is stated at cost less accumulated impairment losses. Goodwill arising on a business combination is
allocated to each cash-generating unit, or groups of cash-generating units, that is expected to benefit from the
synergies of the combination and is tested annually for impairment (see note 1(j)).
On disposal of a cash-generating unit during the year, any attributable amount of purchased goodwill is included
in the calculation of the gain or loss on disposal.
(f) Other intangible assets
Other intangible assets that are acquired by the Group are stated in the balance sheet at cost less accumulated
amortization (where the estimated useful life is finite) and impairment losses (see note 1(j)). Amortization of
intangible assets with finite useful lives is recorded in other operating expenses on a straight-line basis over the
assets’ estimated useful lives, from the date they are available for use. Both the period and method of
amortization are reviewed annually.
Intangible assets are not amortized where their useful lives are assessed to be indefinite. The useful life of an
intangible asset that is not being amortized is reviewed annually to determine whether events and circumstances
continue to support the indefinite useful life assessment for that asset. If they do not, the change in useful life
assessment from indefinite to finite is accounted for prospectively from the date of change and in accordance
with the policy for amortization of intangible assets with finite lives as set out above.
(g) Other investments in equity securities
The Group’s accounting policies for investments in equity securities, other than investments in subsidiaries,
associates and a jointly controlled entity, are as follows:
Investments in equity securities that do not have a quoted market price in an active market and whose fair value
cannot be reliably measured are recognized in the balance sheet at cost less impairment losses (see note 1(j)).
Investments are recognized/derecognized on the date the Group commits to purchase/sell the investments.