Shaw 2015 Annual Report Download - page 65

Shaw Communications Inc.
Notes to the Consolidated Financial Statements
August 31, 2015 and 2014
[all amounts in millions of canadian dollars except share and per share amounts]
Property, plant and equipment
Property, plant and equipment are recorded at purchase cost. Direct labour and other directly attributable costs incurred to
construct new assets, upgrade existing assets and connect new subscribers are capitalized as well as borrowing costs on
qualifying assets. In addition, any asset removal and site restoration costs in connection with the retirement of assets 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 5-20 years
Digital cable terminals and modems 2-5 years
Satellite audio, video and data network equipment and DTH receiving equipment 3-15 years
Transmitters, broadcasting and communication equipment 5-15 years
Buildings 15-40 years
Data centre infrastructure 3-21 years
Data processing 3-4 years
Other 3-20 years
The Company reviews the estimates of lives and useful lives on a regular basis.
Assets held for sale
Non-current assets and disposal groups are classified as held for sale when specific criteria are met and are measured at the
lower of carrying amount and estimated fair value less costs to sell. Assets held for sale are not amortized and are reported
separately on the statement of financial position.
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 three to five years, (ii) credit facility arrangement fees amortized on a
straight-line basis over the term of the facility, (iii) long-term receivables, (iv) network capacity leases, (v) the non-current
portion of prepaid maintenance and support contracts and (vi) direct costs in connection with initial setup fees and installation
of services, as described in the revenue and expenses accounting policy, deferred and amortized on a straight-line basis over
two to ten years.
Intangibles
The excess of the cost of acquiring 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, customer relationships 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.
Customer relationships represent the value of customer contracts and relationships acquired in a business combination and are
amortized on a straight-line basis over the estimated useful life of 15 years.
2015 Annual Report Shaw Communications Inc. 63