Huawei 2013 Annual Report Download - page 64

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Notes to the Consolidated Financial Statements Summary
Where parts of an item of property, plant
and equipment have different useful lives,
the cost or valuation of the item is allocated
on a reasonable basis between the parts
and each part is depreciated separately.
Both the useful life of an item of property,
plant and equipment and its residual value,
if any, are reviewed annually.
(i) Long-term leasehold prepayments
Long-term leasehold prepayments represent
land premium, resettlement fees and related
expenses in obtaining the relevant land use
rights. Long-term leasehold prepayments
are stated at cost, less accumulated
amortisation and impairment losses (see
note 1(l)).
Amortisation is charged to the consolidated
statement of profit or loss on a straight-line
basis over the period of the land use rights
which is generally not exceeding 50 years.
(j) Intangible assets
i) Research and development
Research and development costs comprise
all costs that are directly attributable to
research and development activities or that
can be allocated on a reasonable basis
to such activities. Because of the nature
of the Group’s research and development
activities, the criteria for the recognition of
such costs as assets are generally not met
until late in the development stage of the
project when the remaining development
costs are immaterial. Hence both research
costs and development costs are generally
recognised as expenses in profit or loss in
the period in which they are incurred.
ii) Other intangible assets
Other intangible assets that are acquired
by the Group are stated at cost less
accumulated amortisation (where
the estimated useful life is finite) and
impairment losses (see note 1(l)).
iii) Amortisation
Amortisation of intangible assets with finite
useful lives is charged to profit or loss on a
straight-line basis over the assets’ estimated
useful lives. The following intangible assets
with finite useful lives are amortised from
the date they are available for use and their
estimated useful lives are as follows:
Software 3 years
Patents 3 to 22 years
Trademark 10 years
Both the period and method of amortisation
are reviewed annually.
Intangible assets are not amortised while
their useful lives are assessed to be
indefinite. Any conclusion that the useful
life of an intangible asset is indefinite is
reviewed annually to determine whether
events and circumstances continue to
support the indefinite useful life assessment
for that asset. If they do not, the change in
the useful life assessment from indefinite
to finite is accounted for prospectively from
the date of change and in accordance with
the policy for amortisation of intangible
assets with finite lives as set out above.