Telstra 2011 Annual Report Download - page 143

Telstra Corporation Limited and controlled entities
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Notes to the Financial Statements (continued)
(a) As at June 2011, we had software assets under development
amounting to $593 million (2010: $392 million). As these assets
were not installed and ready for use, there is no amortisation being
charged on the amounts.
(b) During fiscal 2005, we entered into an arrangement with our
jointly controlled entity, Reach Ltd (Reach), and our co-shareholder
PCCW, whereby Reach's international cable capacity was allocated
between us and PCCW under an indefeasible right of use (IRU)
agreement, including committed capital expenditure for the period
until 2022.
The IRU is amortised over the contract periods for the capacity on
the various international cable systems, which range from 5 to 22
years. The IRU is deemed to be an extension of our investment in
Reach. The IRU has a carrying value of nil in the consolidated
financial statements due to the recognition of equity accounted
losses in Reach.
(c) The majority of the deferred expenditure relates to the deferral
of basic access installation costs, which are amortised to goods and
services purchased in the income statement. In addition, the
deferred expenditure also includes direct incremental costs of
establishing a customer contract.
(d) Includes $32 million (2010: $29 million) of capitalised
borrowing costs directly attributable to qualifying assets.
(e) We have recognised an impairment charge of $160 million
against goodwill ($121 million) and customer bases ($39 million)
for the Octave and LMobile Group CGUs (2010: $168 million
impairment of goodwill in CSL New World). Refer to note 21 for
further details regarding these impairments.
14. Intangible assets (continued)