Accounting Policies continued
( ii ) Computer Software Computer software , including computer software which is not an integrated part of an item of computer hardware , is stated at cost less any accumulated amortisation and any accumulated impairment losses . Cost comprises purchase price and any other directly attributable costs .
Computer software is recognised if it meets the following criteria :
• an asset can be separately identified ;
• it is probable that the asset created will generate future economic benefits ;
• the development cost of the asset can be measured reliably ;
• it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity ; and
• the cost of the asset can be measured reliably .
Costs relating to the development of computer software for internal use are capitalised once the recognition criteria outlined above are met . Computer software is amortised over its expected useful life of 5 years , by charging equal instalments to the Income Statement from the date the assets are ready for use .
( iii ) Trademarks Trademarks are shown at historical cost . Trademarks have a finite useful life and are carried at cost less accumulated amortisation . Amortisation is calculated using the straight line method to allocate the cost of trademarks over their estimated useful lives of 5 years .
Impairment of assets Goodwill has an indefinite useful life , not subject to amortisation and is tested annually for impairment , or more frequently if events or changes in circumstances indicate that they might be impaired . Other assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable . An impairment loss is recognised for the amount by which the asset ’ s carrying amount exceeds its recoverable amount . The recoverable amount is the higher of an asset ’ s fair value less costs of disposal and value in use . For the purposes of assessing impairment , assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets ( cash-generating units ). Non-financial assets other than goodwill that suffered an impairment are reviewed for possible reversal of the impairment at the end of each reporting period .
Property , plant and equipment Property , plant and equipment are stated at cost less accumulated depreciation .
The estimated useful lives of property , plant and equipment by reference to which depreciation has been calculated are as follows :
Freehold buildings 50 years
Leasehold improvements 10 years
Plant and equipment 3 - 10 years
Fixtures and fittings 10 years
Computer equipment 3 - 5 years
Motor vehicles 5 years
Land is not being depreciated .
Investments and other financial assets
( i ) Classification The Group classifies its financial assets in the following categories :
• Loans and receivables ,
• Available-for-sale financial assets .
The classification depends on the purpose for which the investments were acquired . Management determines the classification of its investments at initial recognition and , in the case of assets classified as held-to-maturity , re-evaluates this designation at the end of each reporting period . See notes 14 and 32 for details about each type of financial asset .
( ii ) Reclassification The Group may choose to reclassify a non-derivative trading financial asset out of the held for trading category if the financial asset is no longer held for the purpose of selling it in the near term . Financial assets other than loans and receivables are permitted to be reclassified out of the held for trading category only in rare circumstances arising from a single event that is unusual and highly unlikely to recur in the near term . In addition , the Group may choose to reclassify financial assets that would meet the definition of loans and receivables out of the held for trading or available-for-sale categories if the Group has the intention and ability to hold these financial assets for the foreseeable future or until maturity at the date of reclassification .
Reclassifications are made at fair value as of the reclassification date . Fair value becomes the new cost or amortised cost as applicable , and no reversals of fair value gains or losses recorded before reclassification date are subsequently made . Effective interest rates for financial assets reclassified to loans and receivables and held-to-maturity categories are determined at the reclassification date . Further increases in estimates of cash flows adjust effective interest rates prospectively .
Depreciation is calculated in order to write off the cost of property , plant and equipment , other than land and assets under construction , over their estimated useful lives by equal annual instalments .
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