AECON GROUP INC 41 the expenditure is capitalized and the carrying amount of the item replaced is derecognized Similarly maintenance and inspection costs associated with major overhauls are capitalized and depreciated over their useful lives when it is probable that future economic benefts will be available and any remaining carrying amounts of the cost of previous overhauls are derecognized All other costs are expensed as incurred 49 BORROWING COSTS Borrowing costs attributable to the acquisition construction or production of qualifying assets are added to the cost of those assets for periods preceding the dates the assets are available for their intended use All other borrowing costs are recognized as interest expense in the period in which they are incurred 410 GOODWILL AND INTANGIBLE ASSETS Goodwill Goodwill represents the future economic benefts arising from other assets acquired in a business combination that are not individually identifed and separately recognized Goodwill relating to the acquisition of subsidiaries is included on the consolidated balance sheets in concession rights and other intangible assets Goodwill relating to the acquisition of associates is included in the investment of the associate and therefore tested for impairment in conjunction with the associate investment balance Goodwill is not amortized but is reviewed for impairment at least annually and whenever events or circumstances indicate the carrying amount may be impaired Goodwill is allocated to cashgenerating units for the purpose of impairment testing The allocation is made to the cashgenerating units or groups of cashgenerating units that are expected to beneft from the business combination in which the goodwill arose The Companys cashgenerating units generally represent either individual business units or groups of business units that are all below the level of the Companys operating segment In a business combination when the fair value attributable to the Companys share of the net identifable assets acquired exceeds the cost of the business combination the excess is recognized immediately in proft or loss Internally generated goodwill is not recognized Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold Intangible assets Intangible assets acquired as part of a business combination are recorded at fair value at the acquisition date if the asset is separable or arises from contractual or legal rights and the fair value can be measured reliably on initial recognition Separately acquired intangible assets are recorded initially at cost and thereafter are carried at cost less accumulated amortization and impairment if the asset has a fnite useful life Intangible assets are amortized over their estimated useful lives except indefnite life intangible assets which management regards as having an indefnite useful life as there is no foreseeable limit to the period over which the assets are expected to generate future economic benefts Estimated useful lives are determined as the period over which the Company expects to use the asset and for which the Company retains control over benefts derived from use of the asset For intangible assets with a fnite useful life the amortization method and period are reviewed annually and impairment testing is undertaken when circumstances indicate the carrying amounts may not be recoverable Amortization expense on intangibles with fnite lives is recognized in proft or loss as an expense item The major types of intangible assets and their amortization periods are as follows Assets Amortization basis Concession rights Concession period based on estimated traffc volumes Acquired customer backlog Pro rata basis as backlog revenue is worked off Licences software and other rights Licence period 411 SERVICE CONCESSION ARRANGEMENTS IFRIC 12 Service Concessions applies to publictoprivate service concession arrangements in which a public sector body the grantor controls andor regulates the services provided by a private sector entity the operator relating to a concession asset Under IFRIC 12 the Company accounts for its concession arrangements relating to the New Quito Airport project using the intangible asset model The Company has recognized an intangible asset for both the right to operate the Existing Quito Airport whose profts are used to fund construction of the New Quito Airport and the right to the concessions of the New Quito Airport once it begins operations The concession rights relating to the operations of the Existing Quito Airport was recorded at fair value on the grant date The concession rights relating to the New Airport represents the costs to construct the airport See Note 14 for details on how these rights are amortized Under the intangible asset model the operator accounts for revenue and costs relating to construction or upgrade services in accordance with IAS 11 Construction Contracts The operator recognizes revenue and costs relating to operation services in accordance with IAS 18 Revenue Any contractual obligation to maintain or restore infrastructure except for upgrade services is recognized in accordance with IAS 37 Provisions Contingent Liabilities and Contingent Assets Where the Company has a contractual right to receive an intangible asset borrowing costs are capitalized during the construction period Otherwise borrowing costs are expensed in the period in which they are incurred 412 IMPAIRMENT OF NONFINANCIAL ASSETS Property plant and equipment and intangible assets that are subject to amortization are reviewed for impairment at the end of each reporting period If there are indicators of impairment a review is undertaken to determine whether the carrying amounts are in excess of their recoverable amounts An assets recoverable amount is determined as the higher of its fair value less costs to sell and its valueinuse Such reviews are undertaken on an assetbyasset basis except where assets do not generate cash fows independent of other assets in which case the review is undertaken at the cashgenerating unit CGU level Where a CGU or group of CGUs has goodwill allocated to it or includes intangible assets that are either not available for use or that have an indefnite useful life and can only be tested as part of a CGU an impairment test is performed at least annually or whenever there is an indication the carrying amounts of such assets