China Communications Services Corporation Limited Annual Report 2015
110
NOTES TO THE
CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 December 2015
2. SIGNIFICANT ACCOUNTING POLICIES
(continued)
(h) Construction in progress
Construction in progress is stated at cost less impairment losses (see note 2(l)). Cost comprises direct costs of
construction and borrowing costs on related borrowed funds to the extent that they are regarded as an adjustment
to interest charges, during the period of construction.
Capitalisation of these costs ceases and the construction in progress is transferred to property, plant and equipment
and investment properties when substantially all the activities necessary to prepare the asset for its intended use are
completed. No depreciation is provided in respect of construction in progress until it is completed and ready for its
intended use.
(i) Lease prepayments
Lease prepayments represent land use rights paid to the PRC’s government authorities. Land use rights are carried at
cost and are charged to profit or loss on a straight-line basis over the respective periods of the rights.
(j) Intangible assets (other than goodwill)
Expenditure on research activities is recognised as an expense in the period in which it is incurred.
An intangible asset arising from development (or from the development phase of an internal project) is recognised if,
and only if, all of the following have been demonstrated:
a.
the technical feasibility of completing the intangible asset so that it will be available for use or sale;
b.
the intention to complete the intangible asset and use or sell it;
c.
the ability to use or sell the intangible asset;
d.
how the intangible asset will generate probable future economic benefits;
e.
the availability of adequate technical, financial and other resources to complete the development and to use or
sell the intangible asset; and
f.
the ability to measure reliably the expenditure attributable to the intangible asset during its development.
The expenditure capitalised includes the costs of materials, direct labour and an appropriate proportion of overheads
and borrowing costs, where applicable (see note 2(z)). Capitalised development costs are stated at cost less
accumulated amortisation and impairment losses (see note 2(l)). Other development expenditure is recognised as an
expense in the period in which it is incurred.
Other intangible assets that are acquired by the Group are stated at cost less accumulated amortisation (where the
estimated useful life is finite) and impairment losses (see note 2(l)).
Amortisation of intangible assets with finite useful lives is charged to profit or loss from the date they are available
for use on a straight-line basis over the assets’ estimated useful lives.
Both the period and method of amortisation are reviewed annually.
