Fna Project Q6

Question 6 Does the company have any intangible assets? What are these? What are the accounting policies regarding amortization or impairment of these intangible assets? Yes, Stamford Tyres Corporation Limited has intangible assets, which are i.

computer software

ii.

goodwill

iii.

preliminary, pre-operating expenses

iv.

research and development costs

For computer software, they are stated at cost less accumulated amortization and any impairment loss. Commencing from the date the software is available for used, the cost is amortized on a straight line basis over a period of 3 years. Goodwill is regarded as the excess of the fair value of the consideration given over the fair value of the identifiable net assets of the subsidiary, joint venture and associated companies when acquired. Positive goodwill is amortized through the consolidated profit and loss account on a straight line basis over its useful economic life up to a maximum of 20 years, determined on individual basis. Goodwill which is assessed as having no continuing economic value is written off to the consolidated profit and loss account. Preliminary, pre-operating expenses and research and development costs are expensed as incurred, except for development costs which are expected to generate future economic benefits. Such development expenses are capitalized and amortized through profit and loss account on a straight line basis over a period of 5 years upon commencement of operations.