Singapore Airlines 2015 Annual Report Download - page 110

Notes to the Financial Statements
31 March 2015
2 Summary of Significant Accounting Policies (continued)
(e) Subsidiary, associated and joint venture companies (continued)
Aer application of the equity method, the Group determines whether it is necessary to recognise an additional impairment
loss on the Group’s investment in associated or joint venture company. The Group determines at the end of each reporting
period whether there is any objective evidence that the investment in the associated or joint venture company is impaired.
If this is the case, the Group calculates the amount of impairment as the dierence between the recoverable amount of
the associated or joint venture company and its carrying value and recognises the amount in profit or loss.
The most recently available audited financial statements of the associated and joint venture companies are used by the
Group in applying the equity method. Where the dates of the audited financial statements used are not co-terminous with
those of the Group, the share of results is arrived at from the last audited financial statements available and unaudited
management financial statements to the end of the accounting period. Where necessary, adjustments are made to bring
the accounting policies in line with those of the Group.
Upon loss of significant influence or joint control over the associated or joint venture company, the Group measures the
retained interest at fair value. Any dierence between the fair value of the aggregate of the retained interest and proceeds
from disposal and the carrying amount of the investment at the date the equity method was discontinued is recognised
in profit or loss.
The Group accounts for all amounts previously recognised in other comprehensive income in relation to that associated
or joint venture company on the same basis as would have been required if that associated or joint venture company had
directly disposed of the related assets or liabilities.
When an investment in an associated company becomes an investment in a joint venture company or an investment in
joint venture company becomes an investment in an associated company, the Group continues to apply the equity method
and does not remeasure the retained interest.
If the Group’s ownership interest in an associated or joint venture company is reduced, but the Group continues to apply
the equity method, the Group reclassifies to profit or loss the proportion of the gain or loss that had previously been
recognised in other comprehensive income relating to that reduction in ownership interest if that gain or loss would be
required to be reclassified to profit or loss on the disposal of the related assets or liabilities.
When an available-for-sale investment becomes an investment in an associated company, the changes in fair value
previously recognised in fair value reserve are reversed through other comprehensive income to bring the investment
back to its original cost.
(f) Intangible assets
(i) Computer soware
Computer software acquired separately is measured initially at cost. Following initial acquisition, computer
soware is stated at cost less accumulated amortisation and accumulated impairment losses, if any. These costs
are amortised using the straight-line method over their estimated useful lives of 3 to 10 years and assessed for
impairment whenever there is an indication that the computer soware may be impaired. Advance and progress
payments are not amortised. The amortisation period and method are reviewed at least annually.
(ii) Deferred engine development cost
This relates to the Group’s share of engine development payments made in connection with its participation in
aircra engine development projects with other companies. Amortisation of such intangibles begins only when the
aircra engines are available for sale. These deferred engine development costs are amortised on a straight-line
basis over the period of expected sales of the aircra engines, which is estimated to be over a period of 20 years.
The amortisation period and amortisation method would be reviewed annually in light of experience and changing
circumstances, and adjusted prospectively, as appropriate at the end of each reporting period.
108 FINANCIAL