Ársskýrsla Landsbankans - Landsbankinn

Notes to the Consolidated Financial Statements
3. Significant accounting policies (continued)
Property and equipment
All property and equipment is recognised at cost, less accumulated depreciation and accumulated impairment losses. The cost includes expenditures
directly attributable to acquiring these assets.
Subsequent costs are included in an asset’s carrying amount only if it is probable that future economic benefits associated with the item will flow to
the Group and if these costs can be reliably measured. All other repairs and maintenance are charged to the income statement of the financial period
in which their costs are incurred.
Depreciation of any property and equipment is calculated using the straight-line method. This method is applied to the depreciable amount of the
assets, which is their cost less their residual value over their estimated useful lives, as follows:
Buildings 25-50 years
Computer hardware 3 years
Other equipment and motor vehicles
3-10 years
The assets' residual values and useful lives are reviewed annually and adjusted where appropriate.
Gains and losses on disposals are determined by comparing the sale price of an asset with its carrying amount on the date of sale. Gains and losses
are included in the item "Other income and expenses" in the consolidated income statement.
Intangible assets
(a) Computer software licenses
Acquired computer software licenses are capitalised on the basis of the costs incurred to acquire and bring them into service. Computer software
licenses recognised as intangible assets are amortised over their useful life, which is estimated to be 3 - 5 years.
The costs associated with maintaining computer software are recorded as expenses at the time they are incurred.
(b) Goodwill
Goodwill is recognised as an asset only if acquired in a business combination. It is recognised as of the acquisition date and measured as the
aggregate of (a) the fair value of the consideration transferred, (b) the recognised amount of any non-controlling interest in the acquiree, and (c) the
fair value of any previously held equity interest in the acquiree, less the net recognised amount (generally fair value) of the identifiable assets
acquired and liabilities assumed, all measured as of the acquisition date. The consideration transferred includes the fair value of assets transferred,
liabilities incurred and equity interests issued by the Group. In addition, consideration transferred includes the fair value of any contingent
consideration.
Following initial recognition, goodwill is measured at cost, less any accumulated impairment losses. Goodwill is generally reviewed for impairment
annually, but more frequently if events or changes in circumstances indicate a potential impairment of the carrying amount. For the purpose of
impairment testing, goodwill is allocated as of the acquisition date to each of the Group’s cash-generating units (CGUs) or group of CGUs which are
expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those
units. Each unit to which this goodwill is allocated represents the lowest level within the Group at which the goodwill is monitored for internal
management purposes. Where goodwill is attached to a particular unit of a CGU (or of a group of CGUs) and part of the operations within that unit is
disposed of, the goodwill that is associated with the operations disposed of is included in the carrying amount of these operations when determining
the gain or loss incurred upon disposing of the operations.
Impairment of non-financial assets
Assets with an indefinite useful life are not subject to amortisation but are tested annually for impairment. Assets that are subject to amortisation
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 either an asset’s
fair value less selling costs or its value in use, whichever is higher. For the purposes of assessing impairment, assets are grouped at the lowest levels
for which there are separately identifiable cash flows (cash-generating units). With the exception of goodwill, non-financial assets are reviewed at
each reporting date for any possible reversal of impairment.
NBI hf. Consolidated Financial Statements 2010 17
All amounts are in ISK million
Allar upphæðir eru í milljónum króna Ársreikningur 2010 117