Shaw 2012 Annual Report Download - page 75

Shaw Communications Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
August 31, 2012 and 2011
[all amounts in millions of Canadian dollars except share and per share amounts]
amortized and are reported separately on the statement of financial position. The operating
results of a component that has been disposed of or is classified as held for sale are reported as
discontinued operations if the operations and cash flows of the component have been, or will
be, eliminated from the company’s ongoing operations and if the company does not have
significant continuing involvement in the operations of the component after the disposal
transaction. A component of a company includes operations and cash flows that can be clearly
distinguished, operationally and for financial reporting purposes, from the rest of a company’s
operations and cash flows. The Company does not allocate interest to discontinued operations.
Other long-term assets
Other long-term assets 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) long-term receivables; and (iv) the non-current portion of prepaid maintenance and
support contracts.
Intangibles
The excess of the cost of acquiring cable, satellite and media 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 and licenses,
trademarks, brands, program rights and software assets. Broadcast rights and licenses, trademarks
and brands represent identifiable assets with indefinite useful lives. Spectrum licenses were
acquired in Industry Canada’s auction of licenses for advanced wireless services and have an
indefinite life.
Program rights represent licensed rights acquired to broadcast television programs on the
Company’s conventional and specialty television channels and program advances are in respect
of payments for programming prior to the window license start date. For licensed rights, the
Company records a liability for program rights and corresponding asset when the license period
has commenced and all of the following conditions have been met: (i) the cost of the program is
known or reasonably determinable, (ii) the program material has been accepted by the Company
in accordance with the license agreement and (iii) the material is available to the Company for
telecast. Program rights are expensed on a systematic basis generally over the estimated
exhibition period as the programs are aired and are included in operating, general and
administrative expenses. Program rights are segregated on the statement of financial position
between current and noncurrent based on expected life at time of acquisition.
Software that is not an integral part of the related hardware is classified as an intangible asset.
Internally developed software assets are recorded at historical cost and include direct material
and labour costs as well as borrowing costs on qualifying assets for which the commencement
date is on or after September 1, 2010. Software assets are amortized on a straight-line basis
over estimated useful lives ranging from four to ten years. The Company reviews the estimates
of lives and useful lives on a regular basis.
Borrowing costs
The Company capitalizes borrowing costs on qualifying assets, for which the commencement
date is on or after September 1, 2010, that take more than one year to construct or develop
using the Company’s weighted average cost of borrowing.
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