## 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 

## (S) INTANGIBLES 

Intangible assets acquired separately or in a business combination are initially measured at cost. The cost of an intangible asset acquired in a business combination is its fair value as at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and any accumulated impairment losses. Internally generated assets, excluding capitalised development costs, are not capitalised and expenditure is charged against profits or losses in the year the expenditure is incurred. 

The useful lives of intangible assets are assessed to be either finite or indefinite. Intangible assets with finite lives are amortised over the useful life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life is reviewed at least at each financial year-end. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are accounted for by changing the amortisation period or method, as appropriate, which is a change in accounting estimate. The amortisation expense on intangible assets with finite lives is recognised in profit or loss in the expense category consistent with the function of the intangible asset. 

Intangible assets with indefinite useful lives are tested for impairment annually either individually or at the cash-generating unit level. Such intangibles are not amortised. The useful life of an intangible asset with an indefinite life is reviewed each reporting period to determine whether indefinite life assessment continues to be supportable. If not, the change in the useful life assessment from indefinite to finite is accounted for as a change in an accounting estimate and is thus accounted for on a prospective basis. 

## Research and development costs 

Research costs are expensed as incurred. An asset arising from development expenditure on an internal project is recognised only when the Consolidated Entity can demonstrate the technical feasibility of completing the intangible asset so that it will be available for use or sale, or its intention to complete and its ability to use or sell the asset, how the asset will generate future economic benefits, the availability of resources to complete the development and the ability to measure reliably the expenditure attributable to the intangible asset during its development. Following the initial recognition of the development expenditure, the cost model is applied requiring the asset to be carried at cost less any accumulated amortisation and accumulated impairment losses. Any expenditure so capitalised is amortised over the period of expected benefits from the related project. 

The carrying value of an asset arising from development expenditure is tested for impairment annually when the asset is not yet available for use, or more frequently when an indication of impairment arises during the reporting period. 

A summary of policies applied to the Consolidated Entity’s intangible assets is as follows: 

## Royalty Assets 

• Useful Lives Finite. 

• Amortisation method used Amortised over the period of expected future benefit from the related project on a unit of production basis. 

• Internally generated or acquired Acquired. 

• Impairment testing 

Annually and more frequently when an indication of impairment exists. The amortisation method is reviewed at each financial period end. 

## Development Costs 

• Useful Lives Finite. 

• Amortisation method used 

Amortised over the period of expected future benefit from the related project on a straight-line basis. 

• Internally generated or acquired Internally generated. 

• Impairment testing 

Annually for assets not yet available for use and more frequently when an indication of impairment exists. The amortisation method is reviewed at each financial period. 

