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Notes To The Consolidated Financial Statements
(Expressed in Renminbi)
1
/ China Communications Services Corporation Limited
21 Goodwill
(continued)
The recoverable amounts of goodwill arising from the acquisition of CITCC are determined based on value in
use calculation. The calculation use cash flow projection based on financial budget approved by management
covering a one-year period and pre-tax discount rates is 12.3%.
Cash flows beyond the one-year period are maintained constant. Management believes any reasonably
possible change in the key assumptions on which these entities’ recoverable amount are based would not
cause these entities’ carrying amounts to exceed their recoverable amounts.
Key assumptions used for the value in use calculations for these entities are the gross margin and revenue.
Management determined the budgeted gross margin based on the gross margin achieved in the period
immediately before the budget period and its expectation of the trend of major telecommunication operators’
capital expenditure. Revenue was based on the revenue in the period immediately before the budget period.
22 Other intangible assets
The Group
The Company
2011
2010
2011
2010
RMB’000
RMB’000
RMB’000
RMB’000
(Restated)
Cost or deemed cost:
As at 1 January as previously reported
305,089
257,945
6,894
5,977
Change in accounting policy (note 3)
1,278
1,278
–
–
As at 1 January, as restated
306,367
259,223
6,894
5,977
Additions
60,637
57,637
6,860
917
Disposals
(17,047)
(10,493)
–
–
Disposal of subsidiaries
(8,483)
–
–
–
As at 31 December, as restated
341,474
306,367
13,754
6,894
Accumulated amortisation:
As at 1 January as previously reported
153,099
109,492
4,261
2,450
Change in accounting policy (note 3)
3,173
1,229
–
–
As at 1 January, as restated
156,272
110,721
4,261
2,450
Amortisation charge
44,168
44,265
1,220
1,811
Written back on disposal
(5,466)
(8,294)
–
–
Disposal of subsidiaries
(3,366)
–
–
–
Impairment loss
5,757
9,580
–
–
As at 31 December, as restated
197,365
156,272
5,481
4,261
Net carrying value:
As at 31 December, as restated
144,109
150,095
8,273
2,633
As at 1 January, as restated
150,095
148,502
2,633
3,527
Intangible assets mainly represent computer software used in telecommunications infrastructure projects.