Page 141 - Annual Report 2014

Notes to the Financial Statements

Year ended 31 December 2014

2.3 Property, plant and equipment and depreciation (continued)
Depreciation is provided on the straight-line basis over their estimated useful lives as follows:

Leasehold land - 60 years

Leasehold buildings - 30 years to 42 years

Leasehold improvements - Shorter of lease term or 5 years

Network equipment - 2 years to 15 years

Office equipment, computers and furniture and fittings - 2 years to 5 years

Motor vehicles - 5 years

Depreciation methods, useful lives and residual values are reviewed, and adjusted as appropriate, at each reporting date.

No depreciation is provided on freehold property.

No depreciation is provided in respect of property, plant and equipment under construction.

2.4 Intangible assets
Goodwill
Acquisitions prior to 1 January 2010
Goodwill arising on acquisition prior to 1 January 2010 represents the excess of the cost of acquisition over the fair value of the

Group’s share of the identifiable assets, liabilities and contingent liabilities of the acquiree.

Acquisitions on or after 1 January 2010

For acquisitions on or after 1 January 2010, the Group measures goodwill at the acquisition date as:
� the fair value of the consideration transferred; plus
� the recognised amount of any non-controlling interests in the acquiree; plus if the business combination is achieved in

stages, the fair value of the existing equity interest in the acquiree; less
� the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed.

When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss.

Goodwill is stated at cost less accumulated impairment losses. Goodwill is tested for impairment on an annual basis as
described in Note 2.5.

Goodwill arising on acquisitions of subsidiaries that occurred prior to 1 January 2001 was written off against reserves in the
year of acquisition and has not been retrospectively capitalised and amortised.

Goodwill that has previously been taken to reserves is not taken to the income statement when the business is disposed of or
the goodwill is impaired. Similarly negative goodwill that has previously been taken to reserves is not taken to income statement
when the business is disposed.

Telecommunications and spectrum licences

Telecommunications and spectrum licences costs incurred are measured at cost less accumulated amortisation and
accumulated impairment losses. These costs are amortised to income statement using the straight-line method over the period
of the licence, being 10 years to 21 years, commencing from the effective date of the licence.

138 many lives of hubbing