Motor vehicles Equipment Furniture and fittings Leasehold improvements Library books 5 years 3–10 years 5–10 years 5–9 years 5 years 20% 10–33% 10–20% 11–20% 20% Leasehold improvements are depreciated over the unexpired period of the lease or the estimated remaining useful lives of the improvement, whichever is the shorter. The residual value and useful life of an asset is reviewed, and adjusted if applicable, at each financial year-end. Intangible assets Software acquisition Acquired computer software licenses are capitalised on the basis of the costs incurred to acquire and bring to use the specific software. Costs associated with maintaining computer software, the development and maintenance of the Commission’s website, and staff training costs are recognised as an expense when incurred. Trademarks Trademarks are capitalised on the basis of the costs incurred to register the trademark with the Intellectual Property Office of New Zealand. Amortisation The carrying value of an intangible asset with a finite life is amortised on a straight-line basis over its useful life. Amortisation begins when the asset is available for use and ceases at the date that the asset is derecognised. The amortisation charge for each financial year is recognised in the surplus or deficit in the statement of comprehensive income. The useful lives and associated amortisation rates of major classes of intangible assets have been estimated as follows: Computer software Trademarks 2–5 years 10 years 20–50% 10% Impairment of property, plant and equipment and intangible assets Property, plant and equipment and intangible assets that have a finite useful life are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. Value in use is depreciated replacement cost for an asset where the future economic benefits or service potential of the asset are not primarily dependent on the asset's ability to generate net cash inflows and where the entity would, if deprived of the asset, replace its remaining future economic benefits or service potential. If an asset's carrying amount exceeds its recoverable amount, the asset is impaired and the carrying amount is written down to the recoverable amount. The total impairment loss is recognised in the surplus or deficit in the statement of comprehensive income. A reversal of the impairment loss is also recognised in the surplus or deficit. Intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment. An intangible asset that is not yet available for use at the balance sheet date is tested for impairment annually. Creditors and other payables Creditors and other payables are initially measured at fair value and subsequently measured at amortised cost using the effective interest method. Borrowings Borrowings are initially recognised at their fair value plus transaction costs. After initial recognition, all borrowings are measured at amortised cost using the effective interest method. Borrowings are classified as current liabilities if the borrowings are expected to be settled within 12 months of balance date. All other borrowings are classified as a non-current liability. 79