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GB Auto and its subsidiaries (S.A.E.)
Notes to the consolidated financial statements For the financial Year ended December 31, 2014
(In the notes all amounts are shown in Thousand Egyptian Pounds unless otherwise stated)
Repairs and maintenance are charged to the statement of income during the financial year in which they are incurred. The cost of
major renovations are included in the carrying amount of the asset when it is probable that future economic benefits in excess of
the originally assessed standard of performance of the existing asset will flow to the Group. Major renovations are depreciated over
the remaining useful life of the related asset or the estimated useful life of the renovation, whichever is less.
E. Intangible assets
(i) Goodwill
Goodwill represents the excess of the cost of an acquisition over the fair value of the Group’s share of the net identi-
fiable assets of the acquired subsidiary/associate at the date of acquisition. Goodwill on acquisitions of subsidiar-
ies is included in intangible assets. Goodwill on acquisitions of associates is included in investments in associates.
The management annually assesses whether the carrying amount of goodwill is fully recoverable. Impairment
losses on goodwill are charged to the statement of income and are not reversed.
Gains and losses on the disposal of investments in subsidiaries / associates include the carrying amount of good-
will relating to the entity sold.
Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to
those cash-generating units or Groups of cash-generating units that are expected to benefit directly from the busi-
ness combination in which the goodwill arose.
(ii) Computer software
Costs associated with developing or maintenance of computer software programmes are recognised as an expense
as incurred. Costs that are directly associated with identifiable and unique software products controlled by the
Company and will probably generate economic benefits exceeding costs beyond one year, are recognised as intan-
gible assets.
Expenditure, which enhances or extends the performance of computer software programmes beyond their original
specifications is recognised as a capital improvement and added to the original cost of the software. Expenditure
to acquire computer software is capitalized and included as an intangible asset.
Computer software costs recognised as assets are amortised using the straight-line method over their useful lives,
not exceeding a year of 3 years.
(1) Knowhow
The amounts paid against knowhow are recognized as intangible assets in case of knowhow have a finite useful life
and amortized over their estimated useful lives.
F. Impairment of non-financial assets – long-term
Property, plant, equipment, and other non-current assets, including intangible assets are reviewed for impairment losses
whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss
is recognised in the statement of income for the year for the amount by which the carrying amount of the asset exceeds its
recoverable amount, which is the higher of an asset’s net selling price and value in use. For the purposes of assessing impair-
ment, assets are grouped at the lowest level, for which there are separately identifiable cash flows.
Reversal of impairment losses recognized in prior years is recorded when there is an indication that the impairment losses
recognized for the asset no longer exist or has decreased. Impairment losses are also reversed to release the impairment
amount that is equal to the depreciation for the year of the impaired balance. The reversals are recorded in income state-
ment.
G. Non-current assets (or disposal groups) held for sale
Non-current assets (or disposal groups) are classified as assets held for sale when their carrying amount is to be recovered
principally through a sale transaction and a sale is considered highly probable. They are stated at the lower of carrying
amount and fair value less costs to sell.
Ghabbour Auto | 2014 ANNUAL REPORT
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