Vodafone 1999 Annual Report Download - page 58

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Statement of Accounting Policies
Dividends satisfied by the issue of ordinary shares have been credited to reserves. The nominal value of the shares
issued has been offset against the share premium account.
Goodwill
Goodwill is calculated as the surplus of cost over fair value attributed to the net assets (excluding goodwill) of subsidiary
or associated undertakings acquired.
Following the introduction of FRS 10, goodwill in respect of acquisitions made after the financial year ended 31 March
1998 has been capitalised and amortised over its estimated useful economic life. For acquired network businesses,
whose operations are governed by fixed term licences, the amortisation period is determined primarily by reference to the
unexpired licence period and the conditions for licence renewal. For other acquisitions, including customer bases, the
amortisation period for goodwill is typically between 5 and 10 years.
For acquisitions made before 1 April 1998, goodwill was written-off directly to reserves. Goodwill written-off directly to
reserves is reinstated in the profit and loss account when the related business is sold.
Other intangible fixed assets
Purchased intangible fixed assets, including licence fees, are capitalised at cost.
Network licence costs are amortised over the periods of the licences. Amortisation is charged from commencement of
service of the network.
The annual charge is calculated in proportion to the expected usage of the network during the start up period and on a
straight line basis thereafter.
Tangible fixed assets
Tangible fixed assets are stated at cost less accumulated depreciation.
Depreciation is not provided on freehold land. The cost of other tangible fixed assets is written-off, from the time they are
brought into use, by equal instalments over their expected useful lives as follows:
Freehold buildings 25 – 50 years
Leasehold premises the term of the lease
Plant and machinery 10 years
Motor vehicles 4 years
Computers and software 3 – 5 years
Furniture and fittings 10 years
Tangible fixed assets include overheads incurred in the acquisition, establishment and installation of base stations.
Investments
The consolidated financial statements include investments in associated undertakings using the equity method of
http://www.vodafone.com/download/investor/reports/annual99/statement_of_accounting_policies.htm (3 of 4)30/03/2007 00:11:50