41 Karoon Gas Australia Ltd  Annual Report 2011 (j) Security Deposits (k) Plant and Equipment (l) Intangibles Computer Software Goodwill Following initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill is not amortised. Goodwill recognised in a business combination is initially measured at cost being the excess of the cost of the business combination  over the Group’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities. Computer software is tested for impairment in accordance with the accounting policy described in Note 1(n). The assets’ residual values, useful lives and amortisation methods are reviewed, and adjusted if appropriate, at the end of each  reporting period. Commencing from the time the computer software is held ready for use, amortisation expense is calculated on a straight-line basis  to allocate their cost amount, net of their residual values, over their estimated useful lives ranging from two to two and half years. Computer software is stated at cost less accumulated amortisation and any accumulated impairment losses. Computer software  costs have a finite life. Plant and equipment are tested for impairment in accordance with the accounting policy described in Note 1(n). Gains and losses on disposals are determined by comparing proceeds with the net carrying amount. These gains and losses are  included in the consolidated statement of comprehensive income. Plant and equipment residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at the end  of each reporting period. Commencing from the time the plant and equipment is held ready for use, depreciation expense is calculated on a straight-line  basis to allocate their cost amount, net of their residual values, over their estimated useful lives ranging from two to ten years. Plant and equipment is stated at cost less accumulated depreciation and any accumulated impairment losses. Such cost includes  the cost of replacing parts that are eligible for capitalisation when the cost of replacing the parts is incurred. Similarly, when each  major inspection is performed, its cost is recognised in the carrying amount of the plant and equipment as a replacement only if  it is eligible for capitalisation. All other repairs and maintenance are recognised as an expense in the consolidated statement of  comprehensive income as incurred. Security deposits are tested for impairment in accordance with the accounting policy described in Note 1(n). Security deposits are derecognised when the terms and conditions attached to the relevant exploration permit agreements or operating lease rental agreements have expired or been transferred. Security deposits are non-derivative financial assets that are not quoted in an active market. Security deposits are initially  recognised at cost. Such assets are subsequently carried at amortised cost using the effective interest method. They are included  in current assets, except for those with maturities greater than 12 months after the end of the reporting period which are  classified as non-current assets. Certain financial assets have been pledged as security for performance guarantees, performance bonds and bank guarantees  related to exploration permits and operating lease rental agreements. Their realisation may be restricted subject to terms and  conditions attached to the relevant exploration permit agreements or operating lease rental agreements.