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Notes to the Financial Statements
For the fnancial year ended 31 December 2012
3. Summary of significant accounting policies (cont’d)
3.10 Intangible assets (cont’d)
(a) Goodwill (cont’d)
Goodwill and fair value adjustments which arose on acquisitions of foreign operation before 1 January 2005 are deemed to
be assets and liabilities of the Company and are recorded in Rupiah at the rates prevailing at the date of acquisition.
(b) Other intangible assets
Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in
a business combination is their fair values as at the date of acquisition. Following initial recognition, intangible assets are
carried at cost less any accumulated amortisation and any accumulated impairment losses. The useful lives of intangible
assets are assessed to be either fnite or indefnite.
Intangible assets with fnite lives are amortised on a straight-line basis over the estimated economic useful lives and assessed
for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the
amortisation method are reviewed at least at each fnancial year-end. Changes in the expected useful life or the expected pattern
of consumption of future economic benefts embodied in the asset is accounted for by changing the amortisation period or
method, as appropriate, and are treated as changes in accounting estimates. The amortisation expense on intangible assets
with fnite lives is recognised in the consolidated statement of comprehensive income in the expense category consistent
with the function of the intangible asset.
Intangible assets with indefnite useful lives are tested for impairment annually or more frequently if the events or changes
in circumstances indicate that the carrying value may be impaired either individually or at the cash-generating unit level.
Such intangible assets are not amortised. The useful life of an intangible asset with an indefnite life is reviewed annually to
determine whether the useful life assessment continues to be supportable. If not, the change in useful life from indefnite
to fnite is made on a prospective basis.
Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal
proceeds and the carrying amount of the asset and are recognised in the consolidated statement of comprehensive income
when the asset is derecognised.
(i) Research and development costs
Research costs are expensed as incurred. Deferred development costs arising from development expenditures on an
individual project is recognised as an intangible asset only when the Group can demonstrate the technical feasibility of
completing the intangible asset so that it will be available for use or sale, its intention to complete and its ability to use
or sell the asset, how the asset will generate future economic benefts, the availability of resources to complete and the
ability to measure reliably the expenditure during the development.
Following initial recognition of the development costs as an intangible asset, it is carried at cost less accumulated
amortisation and any accumulated losses. Amortisation of the intangible asset begins when development is complete
and the asset is available for use. Development costs have a fnite useful life and are amortised over the period of
expected sales from the related project on a straight line basis.
3.11 Impairment of non-fnancial assets
The Group assesses at each annual reporting period whether there is an indication that an asset may be impaired. If any such indication
exists, or when annual impairment testing for an asset is required, the Group makes an estimate of the asset’s recoverable amount.
Indofood Agri Resources Ltd. • Annual Report 2012 75