Scribd
Upload
190 views

Reflection - PPE and Intangible Assets

ABS-CBN is a leading media and entertainment company in the Philippines involved in television, online, and over-the-top content creation and production. The document examines ABS-CBN's statements of financial position for 2019 and 2018, focusing on property, plant, and equipment (PPE) and intangible assets. PPE includes land, buildings, towers, equipment, and construction in progress, recorded at net carrying value of P27.8 billion in 2018 and P27.5 billion in 2019. Intangible assets include goodwill, program rights, music rights, trademarks, and licenses with finite and indefinite useful lives. Goodwill related to lapsed franchises was derecognized in 2019. Both

Uploaded by

John Christopher Gozun
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
190 views

Reflection - PPE and Intangible Assets

ABS-CBN is a leading media and entertainment company in the Philippines involved in television, online, and over-the-top content creation and production. The document examines ABS-CBN's statements of financial position for 2019 and 2018, focusing on property, plant, and equipment (PPE) and intangible assets. PPE includes land, buildings, towers, equipment, and construction in progress, recorded at net carrying value of P27.8 billion in 2018 and P27.5 billion in 2019. Intangible assets include goodwill, program rights, music rights, trademarks, and licenses with finite and indefinite useful lives. Goodwill related to lapsed franchises was derecognized in 2019. Both

Uploaded by

John Christopher Gozun
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 2

ABS-CBN Corporation is one of the Philippines' leading media and entertainment

organizations. It is primarily involved in content creation and production for television,


online, and over-the-top platforms, cable, satellite, cinema, events, and online radio for
domestic and international markets. Today we are to examine its consolidated statements
of financial position for 2019 and 2018 specifically in the account of the Property, plant,
and equipment and the intangible assets.
Property, plant, and equipment are commonly known as non-current assets or long-
term assets which are expected to hold for more than a period for producing goods and
services or a necessity for the business’s day to day operation, it is usually not held for sale,
a physical form in existence, and by the time it was acquired by the business they are
depreciated annually by time or usage and recorded at its net carrying value except for
land where it is normally increasing its value by time. In the case of ABS-CBN, the PPE in
2018 and 2019 are P27,857,625 and P27,473,741 (in thousands) recorded at carrying
value, respectively. Furthermore, it discloses the details in the supporting note 10 of the
financial statements. The PPE account of ABS CBN primarily contains Land and land
improvements, building and improvements, towers, transmission, televisions, radio, movie,
auxiliary equipment, other equipment, construction in progress (pertains to the cost of
building the production facilities). In addition to that certain properties and equipment of
Sky Cable and PCC with a carrying value of P492 million as of December 31, 2009, were
pledged as collateral to secure the long-term debt of Sky Cable. As part of the refinancing of
other restructured long-term debt of Sky Cable in 2010, creditors of Sky Cable executed a
deed of release of property from indenture lien and cancellation of the mortgage. As of
August 19, 2020, the cancellation of mortgage annotations with the renaming register of
deeds located in some provinces is still in process. And Certain property and equipment
with a cost amounting to P25,009 million and P21,088 million as of December 31, 2019,
and 2018, respectively, have been fully depreciated but are still being used by the
Company. The company also disclosed that due to the denying franchise application of the
Parent Company and the lapse of the franchise of ABS-CBN Convergence, as impairment
indicators on its nonfinancial assets in 2019. Aside from those, the company has also
adopted the PRFS 9 for its PPE account in 2019 which led to an additional column of right-
of-use assets in comparison to the notes in 2018, with that the company has reclassified
some of the costs into directly attributable cost in acquiring these assets.
On the other hand, an intangible asset is an asset that is not physical in nature.
Examples are patents, copyright, franchises, goodwill, trademarks, even software as well.
These intangible assets have the same accounting treatment as PPE. It primarily consists of
two kinds of intangible assets based on useful life, one is indefinite useful life where
depreciation/amortization is not included and should be reviewed normally of its value,
another one is finite useful life where amortization happens by time. In the ABS CBN, the
intangible assets are located in note 12 and consist of goodwill, program rights, music
rights, movie in-process and filmed entertainment, story and publication video rights, and
record master, trademarks, licenses, customer relationships, cable channels, production,
and distribution business – middle east, business process reengineering, and digital
platforms and IP blocks. In the account title of goodwill in 2019, the company discloses that
they have derecognized the goodwill related to CTI, ABS-C, and Sapientis due to the lapse of
the franchise of ABS-C on March 17, 2020. This was considered as an adjusting subsequent
event which is in note 37. For the program rights, the company discloses that on December
31, 2019, the remaining useful life of program rights ranges from one to 25 years. Licenses
with finite life include franchise of KidZania brand in the Philippines, acquired in 2012, by
PIL as December 31, 2019, the remaining useful life of the license is approximately three
years. While other intangible assets assessed to have indefinite life include trademarks and
licenses to operate the wireless business. Trademarks pertain to DCI and Sky Cable's
distinctive sign to promote and distinguish its products and services from those of other
entities. Based on the Company's analysis of all the relevant factors, there is no foreseeable
limit to the period over which the business is expected to generate net cash inflows for the
Company, and therefore, these were assessed to have an indefinite life. Just like the PPE,
the company has disclosed its intangible asset in its carrying value after deducting
amortization cost and impairment losses.

You might also like