Kia 2012 Annual Report Download - page 63

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Depreciation methods, useful lives and residual values are reviewed at the end of each reporting date and adjusted, if appropriate.
The change is accounted for as a change in an accounting estimate.
(k) Borrowing costs
The Company capitalizes borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset
as part of the cost of that asset. Other borrowing costs are recognized in expense as incurred. A qualifying asset is an asset
that requires a substantial period of time to get ready for its intended use or sale. Financial assets and inventories that are
manufactured or otherwise produced over a short period of time are not qualifying assets. Assets that are ready for their intended
use or sale when acquired are not qualifying assets.
(l) Intangible assets
Intangible assets are measured initially at cost and, subsequently, are carried at cost less accumulated amortization and
accumulated impairment losses.
Amortization of intangible assets except for goodwill is calculated on a straight-line basis over the estimated useful lives of
intangible assets from the date that they are available for intented use. The residual value of intangible assets is zero. However, as
there are no foreseeable limits to the periods over which memberships are expected to be available for use, this intangible asset is
determined as having indefinite useful lives and not amortized.
The estimated useful lives for the current and comparative periods are as follows:
Amortization periods and the amortization methods for intangible assets with finite useful lives are reviewed at the end of each
reporting period. The useful lives of intangible assets that are not being amortized are reviewed at the end of each reporting period
to determine whether events and circumstances continue to support indefinite useful life assessments for those assets. Changes
are accounted for as changes in accounting estimates.
RESEARCH AND DEVELOPMENT Expenditures on research activities, undertaken with the prospect of gaining new scientific
or technical knowledge and understanding, is recognized in profit or loss as incurred. Development expenditures are capitalized
only if development costs can be measured reliably, the product or process is technically and commercially feasible, future economic
benefits are probable, and the Company intends to and has sufficient resources to complete development and to use or sell the
asset. Other development expenditures are recognized in profit or loss as incurred.
SUBSEQUENT EXPENDITURES Subsequent expenditures are capitalized only when they increase the future economic benefits
embodied in the specific asset to which it relates. All other expenditures, including expenditures on internally generated goodwill
and brands, are recognized in profit or loss as incurred.
(m)
Investment property
Property held for the purpose of earning rentals or benefiting from capital appreciation is classified as investment property.
Investment property is measured initially at its cost. Transaction costs are included in the initial measurement. Subsequently,
investment property is carried at depreciated cost less any accumulated impairment losses.
Estimated useful lives (years)
Intellectual property rights 5, 10
Software 5
Development costs (*)
Country club membership and golf club membership Indefinite
(*) Capitalized development costs are amortized over the useful life considering the life cycle of the developed products.
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