Shaw 2009 Annual Report Download - page 68

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Property, plant and equipment
Property, plant and equipment are recorded at purchase cost. Direct labour and direct overhead
incurred to construct new assets, upgrade existing assets and connect new subscribers are
capitalized. Repairs and maintenance expenditures are charged to operating expense as incurred.
Amortization is recorded on a straight-line basis over the estimated useful lives of assets as follows:
Asset Estimated useful life
Cable and telecommunications distribution system 6-15 years
Digital cable terminals and modems 2-7 years
Satellite audio, video and data network equipment and DTH receiving
equipment 4-10 years
Buildings 20-40 years
Data processing 4 years
Other 3-20 years
The Company reviews property, plant and equipment for impairment whenever events or changes in
circumstances indicate that the carrying value may not be recoverable. An impairment is recognized
when the carrying amount of an asset is greater than the future undiscounted net cash flows
expected to be generated by the asset. The impairment is measured as the difference between the
carrying value of the asset and its fair value calculated using quoted market prices or discounted
cash flows.
Deferred charges
Deferred charges primarily include (i) equipment costs, as described in the revenue and expenses
accounting policy, deferred and amortized on a straight-line basis over two to five years; (ii) credit
facility arrangement fees amortized on a straight-line basis over the term of the facility; (iii) costs
incurred in respect of connection fee revenue and upfront installation revenue, as described in the
revenue and expenses accounting policy, deferred and amortized over two to ten years; and (iv) the
non-current portion of prepaid maintenance and support contracts.
Intangibles
The excess of the cost of acquiring cable and satellite businesses over the fair value of related net
identifiable tangible and intangible assets acquired is allocated to goodwill. Net identifiable
intangible assets acquired consist of amounts allocated to broadcast rights which represent
identifiable assets with indefinite useful lives.
Goodwill and intangible assets with an indefinite life are not amortized but are subject to an annual
review for impairment. Identifiable intangibles are tested for impairment by comparing the
estimated fair value of the intangible asset with its carrying amount. Goodwill impairment is
determined using a two-step process. The first step involves a comparison of the estimated fair
value of the reporting unit to its carrying amount, including goodwill. If the fair value of a reporting
unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired, thus the
second step of the impairment test is unnecessary. If the carrying amount of the reporting unit
exceeds its fair value, the second step of the impairment test is performed to measure the amount of
the impairment loss.
64
Shaw Communications Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
August 31, 2009, 2008 and 2007
[all amounts in thousands of Canadian dollars except share and per share amounts]