Huawei 2014 Annual Report Download - page 70

68 Huawei Investment & Holding Co., Ltd. 2014 Annual Report
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.
(k) Leased assets
An arrangement, comprising a transaction or a
series of transactions, is or contains a lease if the
Group determines that the arrangement conveys
a right to use a specific asset or assets for an
agreed period of time in return for a payment
or a series of payments. Such a determination is
made based on an evaluation of the substance
of the arrangement and is regardless of whether
the arrangement takes the legal form of a lease.
i) Classification of assets leased to the Group
Assets that are held by the Group under leases
which transfer to the Group substantially all the
risks and rewards of ownership are classified as
being held under finance leases. Leases which
do not transfer substantially all the risks and
rewards of ownership to the Group are classified
as operating leases.
ii) Operating lease charges
Where the Group has the use of assets held
under operating leases, payments made under
the leases are charged to profit or loss in equal
instalments over the accounting periods covered
by the lease term, except where an alternative
basis is more representative of the pattern of
benefits to be derived from the leased asset.
Lease incentives received are recognised in profit
or loss as an integral part of the aggregate net
lease payments made.
Contingent rentals are charged to profit or loss in
the accounting period in which they are incurred.
(l) Impairment of assets
i) Impairment of investments in debt and equity
securities and other receivables
Investments in debt and equity securities and
other current and non-current receivables that
are stated at cost or amortised cost or are
classified as available-for-sale securities are
reviewed at the end of each reporting period to
determine whether there is objective evidence of
impairment. Objective evidence of impairment
includes observable data that comes to the
attention of the Group about one or more of the
following loss events:
■ significant financial difficulty of the debtor;
■ a breach of contract, such as a default or
delinquency in interest or principal payments;
■ it becoming probable that the debtor
will enter bankruptcy or other financial
reorganisation;
■ significant changes in the technological,
market, economic or legal environment that
have an adverse effect on the debtor; and
■ a significant or prolonged decline in the
fair value of an investment in an equity
instrument below its cost.
If any such evidence exists, any impairment loss
is determined and recognised as follows:
■ For investments in associates and joint
ventures accounted for under the equity
method (see note 1(f)), the impairment loss
is measured by comparing the recoverable
amount of the investment with its carrying
amount in accordance with note 1(l)(ii). The
impairment loss is reversed if there has been
a favourable change in the estimates used
to determine the recoverable amount in
accordance with note 1(l)(ii).