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5 Project under construction
The projects under construction recognized at cost. All expenses related to cost includes direct and necessary to prepare the
asset to the state that is ready to use and in the purpose for which it was acquired for. The asset transferred fromprojects under
construction to fixed assets when it is completed and ready to use.
J Intangible assets and goodwill
1 Recognition and measurement
I
Goodwill:
Arising on the acquisition of subsidiaries is measured at cost less accumulated impairment losses.
II
Other intangible assets:
Other intangible assets, including patents and trademarks, that are acquired by the Group and have finite useful lives are
measured at cost less accumulated amortization and any accumulated impairment losses.
III
Computer software
Costs associatedwithdevelopingormaintenanceof computer softwareprogrammes are recognisedas anexpenseas incurred.
Costs that are directly associatedwith identifiable andunique software products controlledby the Company andwill probably
generate future economic benefits beyond one year, are recognised as intangible assets.
Expenditure, which enhances or extends the performance of computer software programmes beyond their original specifica-
tions 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-linemethod over their useful lives and not exceeding a year of 3 years.
IV Knowhow
The amounts paid against knowhoware recognized as intangible assets in case of knowhowhave a finite useful life and amor-
tized over their estimated useful lives.
2 Subsequent expenditure
Subsequent expenditure is capitalised only when the intangible asset will increase the future economic benefits embodied in
project, research, anddevelopment under constructionwhich is recognized as intangible assets. All other expenditure, includ-
ing expenditure on internally generated goodwill and brands, is recognised in profit or loss as incurred.
3 Amortization
Amortisation is calculated to write off the cost of intangible assets less their estimated residual values using the (straight
‑
line
method) over their estimated useful lives, and is generally recognised in profit or loss.
Goodwill is not amortised.
Amortizationmethods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.
K Investment property
Investment property is property held by the Group for rental or rise in value, or both and initiallymeasured at cost and subse-
quently at cost less accumulated depreciation and impairment, and recognize in profit and loss the depreciation expenses and
impairment losses.
The depreciation of investment property calculated using (straight-linemethod) over their estimated useful lives for each type
of investment property, land is not depreciated.
2016 ANNUAL REPORT
101
GB Auto (S.A.E.)
Notes to the consolidated financial statements for the financial year ended December 31, 2016
(In thenotes all amounts are shown inThousandEgyptianPounds unless otherwise stated)