Annual Report 2020

2. Summary of significant accounting policies (cont'd.) 2.6 Intangible assets (cont'd.) 2.6.2 Other intangible assets (cont'd.) Intangible assets with indefinite useful lives or not yet available for use are tested for impairment annually, or more frequently if the events and circumstances indicate that the carrying value may be impaired either individually or at the cash generating unit level. Such intangible assets are not amortised. The useful life of an intangible asset with an indefinite useful life is reviewed annually to determine whether the useful life assessment continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis. Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in profit or loss when the asset is derecognised. (i) Research and development – internally developed software Research expenditure is recognised as an expense when incurred. Costs incurred on development projects (relating to the design and testing of new or improved products) are recognised as intangible assets when the following criteria are fulfilled: - it is technically feasible to complete the intangible asset so that it will be available for use or sale; - management intends to complete the intangible asset and use or sell it; - there is an ability to use or sell the intangible asset; - it can be demonstrated how the intangible asset will generate probable future economic benefits; - a dequate technical, financial and other resources to complete the development and to use or sell the intangible asset are available; and, - the expenditure attributable to the intangible asset during its development can be reliably measured. Other development expenditures that do not meet these criteria are recognised as an expense when incurred. Development costs previously recognised as an expense are not recognised as an asset in subsequent period. Capitalised development costs recognised as intangible assets are amortised from the point at which the asset is ready for use on a straight-line basis over its useful life which is 7 years. (ii) Landing rights Landing rights relate to traffic rights and landing slots for destinations operated by the Group's airline operating centres and are recorded at cost less any accumulated impairment losses. Landing rights are allocated to CGUs and are not amortised as they are considered to have an indefinite useful life and are tested annually for impairment. 2.7 Investments in subsidiaries, joint venture and associates In the Company’s separate financial statements, investments in subsidiaries is stated at cost less accumulated impairment losses. Amounts due from associates of which the Company does not expect repayment in the foreseeable future are treated as part of the parent's net investment in associates. Where an indication of impairment exists, the carrying amount of the investment is assessed and written down immediately to its recoverable amount (see Note 2.8). On disposal of investments in subsidiaries, joint venture and associates, the difference between disposal proceeds and the carrying amounts of the investments are recognised in profit or loss. Notes to the Financial Statements For the financial year ended 31December 2020 194 AIRASIA GROUP BERHAD