Shaw 2013 Annual Report Download - page 32

S
haw
C
ommunications Inc
.
MANA
G
EMENT’
S
DI
SCUSS
I
O
N AND ANALY
S
I
S
August
31
,
2013
est
i
mated l
if
eo
f
certa
i
n
p
ro
p
ert
y
,
p
lant and e
q
u
ip
ment or other
i
ntan
gi
bles wh
i
ch could resul
t
in higher amortization expense in future periods or an impairment charge to write down the
value of property, plant and equipment or other intangibles.
v
) Intan
g
ible
s
The excess of the cost of ac
q
uirin
g
cable and satellite and media businesses over the fair valu
e
of
related net
i
dent
ifi
able tan
gi
ble and
i
ntan
gi
ble assets ac
q
u
i
red
i
s allocated to
g
oodw
i
ll. Net
identifiable intangible assets acquired consist primarily of amounts allocated to broadcas
t
rights and licenses which represent identifiable assets with indefinite useful lives
.
B
roadcast rights and licenses in the cable and satellite businesses are comprised of broadcas
t
author
i
t
i
es
i
nclud
i
n
g
l
i
censes and exem
p
t
i
ons
f
rom l
i
cens
i
n
g
that allow access to homes and
subscr
i
bers
i
n a spec
ifi
c area that are
i
dent
ifi
ed on a bus
i
ness comb
i
nat
i
on w
i
th respect to the
acquisition of shares or assets of a BDU.
B
roadcast l
i
censes
i
n the med
i
a bus
i
ness are l
i
censes to operate convent
i
onal and spec
i
alt
y
services that are identified on a business combination with respect to the acquisition of shares
o
r assets o
f
a broadcast
i
n
g
undertak
i
n
g.
The
C
om
p
an
y
has concluded that the broadcast r
ig
hts and l
i
censes have
i
nde
fi
n
i
te use
f
ul l
i
ves
s
i
nce there are no legal, regulatory, contractual, econom
i
c or other
f
actors that would preven
t
t
he Company’s license renewals or limit the period over which these assets will contribute t
o
t
he
C
om
p
an
y
’s cash
f
lows.
G
oodw
i
ll and broadcast r
ig
hts and l
i
censes are not amort
i
zed but
assessed
f
or
i
mpa
i
rment on an annual bas
i
s
i
n accordance w
i
th IA
S36“
Impa
i
rment”.
The
C
ompany also owns AW
S
l
i
censes that are requ
i
red to operate a w
i
reless system
i
n
C
anada
.
The AWS licenses have indefinite lives and are subject to an annual review for impairment by
com
p
ar
i
n
g
the est
i
mated
f
a
i
r value to the carr
yi
n
g
amount. In late
2011 S
haw dec
i
ded not t
o
pursue a convent
i
onal w
i
reless bu
i
ld. Dur
i
ng
2013
the
C
ompany entered
i
nto an agreemen
t
with Rogers granting Rogers an option to acquire its wireless spectrum licenses. The potentia
l
op
t
i
on exerc
i
se
f
or the sale o
f
the w
i
reless s
p
ectrum l
i
censes
i
s sub
j
ect to var
i
ous re
g
ulator
y
approvals and
i
s expected to occur
i
n
fi
scal
201
5.
P
rogram r
i
ghts represent l
i
censed r
i
ghts acqu
i
red to broadcast telev
i
s
i
on programs on the
Company’s conventional and specialty television channels and program advances are in respect
of p
a
y
ments
f
or
p
ro
g
ramm
i
n
gp
r
i
or to the w
i
ndow l
i
cense start date. For l
i
censed r
ig
hts, the
Company records a liability for program rights and corresponding asset when the license period
h
as commenced and all of the following conditions have been met: (i) the cost of the program is
known or reasonabl
y
determ
i
nable,
(ii)
the
p
ro
g
ram mater
i
al has been acce
p
ted b
y
the
C
om
p
an
y
in accordance with the license agreement and (iii) the material is available to the Company for
t
elecast. Program rights are expensed on a systematic basis generally over the estimate
d
exh
i
b
i
t
i
on
p
er
i
od as the
p
ro
g
rams are a
i
red and are
i
ncluded
i
no
p
erat
i
n
g
,
g
eneral an
d
administrative expenses.
Other intangibles include software that is not an integral part of the related hardware, custome
r
relationships as well as a trademark and brands. Software is amortized on a straight-line basi
s
o
ver the
i
r est
i
mated use
f
ul l
i
ves ran
gi
n
gf
rom
f
our to ten
y
ears.
C
ustomer relat
i
onsh
ips
represent the value of customer contracts and relationships acquired in a business combinatio
n
and are amortized on a straight-line basis over the estimated useful life of 15 years.
28