Telus 2007 Annual Report Download - page 18

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With the exception of terminal devices located at customer premises, most of the
Company’s communications plant and equipment are located on land owned or leased,
or on rights-of-way obtained, by TELUS.
The properties of TELUS include: (i) office space; (ii) work centres for field service and
materials management personnel; and (iii) space for exchange, toll and mobile radio
equipment. A small number of buildings are constructed on leasehold land and the
majority of the relay stations for TELUS’ public service radio-telephone network are
situated on lands held under leases or licences for varying terms. The network facilities
of TELUS are constructed under or along streets or highways pursuant to rights-of-way
granted by the owners of land including municipalities and on land owned by the Crown
or on freehold land owned by TELUS. Other communications property, plant and
equipment consist of plant under construction and materials and supplies used for
construction and repair purposes. Identifiable intangible assets include wireless
spectrum licences, subscriber base and computer software.
As at December 31, 2007, goodwill had a net book value of $3.2 billion. Goodwill
represents the excess of cost of acquired businesses over the fair value attributed to the
net identifiable assets.
TELUS monitors its operations for compliance with applicable environmental
requirements and standards, and implements preventative and remedial actions as
required. TELUS’ business of telecommunications services does not generate
significant waste products that would be considered hazardous. For these reasons,
remedial action has not been significant to the ongoing operations and expenditures of
TELUS.
Value of intangible assets and goodwill
The carrying value of intangible assets with indefinite lives, and goodwill, are periodically
tested for impairment using a two-step impairment test. The frequency of the
impairment test generally is the reciprocal of the stability of the relevant events and
circumstances, but intangible assets with indefinite lives and goodwill must, at a
minimum, be tested annually. The Company has selected December as its annual test
time. No impairment amounts arose from the December 2007, 2006 and 2005 annual
tests. The test is applied to each of the Company’s two reporting units: wireline and
wireless, which reporting units are identified in accordance with the criteria in the
Canadian Institute of Chartered Accountants (CICA) Handbook section for intangible
assets and goodwill.
Intangible assets with finite lives (“intangible assets subject to amortization”) are
amortized on a straight-line basis over their estimated lives; estimated lives are reviewed
at least annually and are adjusted as appropriate.
RISK FACTORS
Management’s discussion and analysis -- Section 10 Risks and risk management in
TELUS’ 2007 Annual Report – Financial Review is hereby incorporated by reference.
Management’s discussion and analysis is available at www.sedar.com.