Page 46 - 2012_Annual Report

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Saskatchewan Indian Gaming Authority Inc.
Notes to the Financial Statements
year ended March 31, 2012
44
3.
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
INTANGIBLE ASSETS
Intangible assets acquired separately are measured on initial recognition at cost, less any accumulated amortization and
accumulated impairment losses, if any. SIGA’s only identifiable intangible asset is software. Software costs include the cost
of externally purchased software packages and, for internally developed programs, related external and direct labour costs.
Maintenance of existing software programs is expensed as incurred.
Amortization is calculated on a straight-line basis over its estimated useful life of between 1 to 5 years. The amortization method
and estimated useful life is reviewed annually and any changes are applied prospectively.
LEASES
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership
to SIGA. All other leases are classified as operating leases.
Assets held under a finance lease are initially recognized as assets of SIGA and are recorded at their fair value at the inception
of the lease, or if lower, at the present value of the future minimum lease payments. The corresponding liability to the lessor is
included in the statement of financial position as a finance lease obligation.
Lease payments are apportioned between interest expense and a reduction of the lease obligation so as to achieve a constant rate
of interest on the remaining balance of the liabilities. The interest component is recognized in finance costs in the statement of
comprehensive income.
Operating lease payments are recognized as an expense on a straight-line basis over the lease term.
IMPAIRMENT OF NON-FINANCIAL ASSETS
At the end of each reporting period, SIGA reviews the carrying amount of its tangible and intangible assets to determine whether
there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount
of the asset is estimated in order to determine the extent of the impairment loss (if any). When it is not possible to estimate the
recoverable amount of an individual asset, SIGA estimates the recoverable amount of the cash-generating unit to which the asset
belongs. When a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual
cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units that a reasonable and
consistent basis of allocation can be identified.
Recoverable amount is the higher of the fair value less costs to sell and value in use. In assessing value in use, the estimated future
cash flows are discounted to their present value using a discount rate that reflects current market assessments of the time value of
money and the risks specific to the asset for which estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying
amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognized immediately
in the statement of comprehensive income. When an impairment loss subsequently reverses, the carrying amount of the asset
(or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount
does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset
(or cash-generating unit) in prior years. A reversal of an impairment loss is recognized immediately in the statement of
comprehensive income.