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day-to-day servicing for items of property, plant and equipment, such as repairs and maintenance, expensed when incurred. 

When an item of property, plant and equipment has a signifi- cant component, such component is accounted for as a sepa- rate item of property, plant and equipment. Depreciation of an asset begins when it is available for use. The depreciable amount of items of property, plant and equipment is depreci- ated on a straight-line basis over the estimated useful lives of each component. The depreciable amount of an asset is determined by deducting its residual value from its cost. 

The estimated useful lives of major classes of property, plant and equipment are as follows: 

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The useful lives, residual values, and depreciation methods of property, plant and equipment are reviewed at the end of fiscal year, and changed, if any. 

## (10) Leases 

Leases are classified as finance leases whenever substantially all the risks and rewards incidental to ownership of an asset are transferred to the Group. All other leases are classified as operating leases. 

Under finance lease transactions, leased assets and lease obligations are initially recognised at the lower of the fair value of the leased property or the present value of the minimum lease payments, each determined at the inception of the lease. 

Leased assets are depreciated on a straight-line basis over the shorter of their estimated useful lives or lease terms. Minimum lease payments made under finance leases are allocated to finance expense and the repayment amount of the lease obli- gations. The finance expense is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of liabilities. 

Under operating lease transactions, lease payments are recognised as an expense on a straight-line basis over the lease term. The Group determines whether an arrangement is, or con- 

tains a lease, based on the substance of the arrangement at the date of commencement of the lease. The substance of the arrangement is determined based on the following factors: 

(a) whether the fulfillment of the arrangement is dependent on the use of a specific asset or assets and, 

(b) whether the arrangement conveys a right to use the asset. 

## (11) Goodwill 

Measurement of goodwill on initial recognition is described in “(2) Business combinations”. After initial recognition, goodwill is carried at cost less any accumulated impairment losses. 

Impairment of goodwill is described in “(13) Impairment of property, plant and equipment, goodwill, and other intangible assets”. 

## (12) Other intangible assets 

Other intangible assets are identifiable non-monetary assets without physical substance, other than goodwill, including patents and technologies, marketing rights, and in-process research and development (IPR&D) acquired in a business combination or acquired separately. 

Other intangible assets acquired separately are measured at cost upon initial recognition, and those acquired in a business combination are measured at fair value at the acquisition date. 

After initial recognition, the Group applies the cost model and other intangible assets are carried at cost less any accumulated amortisation and accumulated impairment losses. 

Other intangible assets are amortised over their estimated useful lives (2-25 years) on a straight-line basis beginning at the time when they are available for use. Amortisation of other intangible assets acquired through business combinations or through the in-licensing of products or technologies is presented in the consolidated statements of income under “Amortisation of intangible assets”. The estimated useful life of other intan- gible assets is the shorter of the period of legal protection or its economic life, and it is also regularly reviewed. 

Among rights related to products or research and develop- ment through the in-licensing of products or technologies or acquired through business combinations, those that are still in the research and development stage or have not yet obtained marketing approval from the regulatory authorities are recognised under “Other intangible assets” as IPR&D. 

Subsequent expenditure, including initial upfront and mile- stone payments to the third parties, on an acquired IPR&D is capitalised if, and only if, it is probable that the expected future economic benefits that are attributable to the asset will flow to the Group and the asset is identifiable. 

An intangible asset recognised as IPR&D is not amortised because it is not yet available for use, but instead, it is tested for impairment whenever there is an indication of impairment or at least on an annual basis irrespective of whether there is any indication. 

Once marketing approval from the regulatory authorities is obtained and the asset is available for use, IPR&D is trans- ferred to “Patents and technologies” or “Marketing rights” and amortisation begins from that time on a straight-line basis over its useful life. 

