Huawei 2011 Annual Report Download - page 44

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Group are stated in the consolidated balance
sheet at cost less accumulated amortisation
(where the estimated useful life is finite) and
impairment losses (see note 1(k)).
iv) Amortisation
Amortisation of intangible assets with finite
useful lives is charged to profit or loss on a
straight-line basis over the asssets’ estimated
useful lives. The following intangible assets with
finite useful lives are amosrtised from the date
they are available for use and their estimated
useful lives are as follows:
Software 3 years
Patents 3 to 22 years
Trademark 10 years
Both the period and method of amortisation are
reviewed annually.
Intangible assets are not amortised while their
useful lives are assessed to be indefinite. Any
conclusion that the useful life of an intangible
asset is indefinite 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 the useful life assessment from
indenite to nite is accounted for prospectively
from the date of change and in accordance with
the policy for amortisation of intangible assets
with nite lives as set out above. The group has
no intangible assets with indenite useful life.
(j) Leased assets
An arrangement, comprising a transaction or a
series of transactions, is or contains a lease if the
Group determines that the arrangement conveys
a right to use a specific asset or assets for an
agreed period of time in return for a payment
or a series of payments. Such a determination is
made based on an evaluation of the substance of
the arrangement and is regardless of whether the
arrangement takes the legal form of a lease.
i) Classication of assets leased to the Group
Assets that are held by the Group under leases which
transfer to the Group substantially all the risks and
rewards of ownership are classified as being held
under finance leases. Leases which do not transfer
substantially all the risks and rewards of ownership to
the Group are classied as operating leases.
ii) Operating lease charges
Where the Group has the use of assets held
under operating leases, payments made under
the leases are charged to prot or loss in equal
instalments over the accounting periods covered
by the lease term, except where an alternative
basis is more representative of the pattern of
benefits to be derived from the leased asset.
Lease incentives received are recognised in prot
or loss as an integral part of the aggregate
net lease payments made. Contingent rentals
are charged to profit or loss in the accounting
period in which they are incurred.
(k) Impairment of assets
i) Impairment of investments in debt and equity
securities and others receivables
Investments in debt and equity securities and
other current and non-current receivables that are
stated at cost or amortised cost or are classied as
available-for-sale securities are reviewed at each
balance sheet date to determine whether there
is objective evidence of impairment. Objective
evidence of impairment includes observable data
that comes to the attention of the Group about
one or more of the following loss events:
■ signicant nancial difculty of the debtor;
■ a breach of contract, such as a default or
delinquency in interest or principal payments;
■ it becoming probable that the debtor will enter
bankruptcy or other nancial reorganisation;
■ significant changes in the technological,
market, economic or legal environment that
have an adverse effect on the debtor; and
■ a significant or prolonged decline in the fair
value of an investment in an equity instrument
below its cost.
If any such evidence exists, any impairment loss
is determined and recognised as follows:
■ For investments in associates and jointly
controlled entities recognised using the equity
method (see note 1(f)), the impairment loss
is measured by comparing the recoverable
Consolidated Financial Statements Summary and Notes