NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
We incur costs related to subscriber acquisition and retention.
 We capitalize cable installation costs that relate to the cable network
and depreciate them over the expected life of the cable customer.
 We defer direct incremental installation costs related to reconnect
Cable customers and amortize them as the related reconnect
installation revenues are recorded.
 We expense all other costs as incurred.
We calculate gains and losses on the disposal of property, plant and
equipment by comparing the proceeds from the disposal with the
item’s carrying amount, and recognize the gain or loss in other income
in the consolidated statements of income.
Depreciation
We depreciate property, plant and equipment over its estimated useful
life by charging depreciation expense to the consolidated statements of
income as follows:
Asset Basis Estimated useful life
Buildings Diminishing balance 5 to 25 years
Cable and wireless network Straight-line 3 to 30 years
Computer equipment and
software
Straight-line 4 to 10 years
Customer premise equipment Straight-line 3 to 5 years
Leasehold improvements Straight-line Over shorter of estimated
useful life and lease term
Equipment and vehicles Diminishing balance 3 to 20 years
Components of an item of property, plant and equipment may have
different useful lives. We make significant estimates when determining
depreciation methods, depreciation rates and asset useful lives, which
requires taking into account industry trends and company-specific
factors. We review these decisions at least once each year or when
circumstances change. We will change our depreciation methods,
depreciation rates or asset useful lives if they are different from our
previous estimates. We recognize the effect of these changes in net
income prospectively.
We capitalize development expenditures if they meet the criteria for
recognition as an asset, and amortize them over their expected useful
lives once they are available for use.
We expense research expenditures and maintenance and training costs
as incurred.
See note 12 for more information about our property, plant and
equipment.
Acquired Program Rights
Program rights are contractual rights we acquire from third parties to
broadcast television programs. We record them at cost less
accumulated amortization and accumulated impairment losses. We
capitalize program rights and the related liabilities on the consolidated
statements of financial position when the licence period begins and the
program is available for use, and amortize them to other external
purchases in operating costs in the consolidated statements of income
over the expected exhibition period, which ranges from one to five
years. If programs are not scheduled, we consider the related program
rights to be impaired and write them off. Otherwise, we test them for
impairment as intangible assets with finite useful lives. Program rights
for multi-year sports programming arrangements are expensed when
the games are aired.
Goodwill
We record goodwill arising from business combinations when the fair
value of the separately identifiable assets and liabilities we acquired is
lower than the consideration we paid (including the recognized amount
of the non-controlling interest, if any). If the fair value of the
consideration transferred is lower than the separately identified assets
and liabilities, we immediately record the difference as a gain in net
income.
See note 7 and note 13 for more information about our goodwill.
Intangible Assets
We record intangible assets we acquire in business combinations at fair
value, and test for impairment as required (seeImpairment, below).
We do not amortize intangible assets with indefinite lives (spectrum and
broadcast licences) because there is no foreseeable limit to the period
that these assets are expected to generate net cash inflows for us. We
use judgment to determine the indefinite life of these assets, analyzing