60
Notes to Financial Statements
December 31, 2014
2. Summary of Significant Accounting Policies (cont’d)
PROPERTY, PLANT AND EQUIPMENT
Freehold land and construction-in-progress are stated at cost less impairment losses. Other items of property, plant and
equipment are carried at cost, less accumulated depreciation and any impairment loss where the recoverable amount
of the asset is estimated to be lower than its carrying amount. Cost includes expenditure that is directly attributable to
the acquisition of the asset and includes the cost of dismantling and removing the items and restoring the site on which
they are located.
Depreciation is charged so as to write off the cost of assets, over their estimated useful lives, using the straight-line
method, on the following bases:
Freehold buildings
-
20 to 42 years
Leasehold land and buildings
-
16 to 50 years
Furniture, fittings and renovation -
1 to 15 years
Plant and machinery
-
2 to 10 years
Equipment and motor vehicles
-
2 to 7 years
Computers
-
1 to 5 years
No depreciation is charged for freehold land and construction-in-progress.
The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period,
with the effect of any changes in estimate accounted for on a prospective basis.
Assets held under finance leases are depreciated over their expected useful lives on the same basis as owned assets or, if
there is no certainty that the lessee will obtain ownership by the end of the lease term, the asset shall be fully depreciated
over the shorter of the lease term and its useful life.
The gain or loss arising on disposal or retirement of an item of property, plant and equipment is determined as the
difference between the sales proceeds and the carrying amounts of the asset and is recognised in profit or loss.
Fully depreciated assets still in use are retained in the financial statements.
IMPAIRMENT OF NON-FINANCIAL ASSETS
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated
future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows
have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the
carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is
recognised immediately in profit or loss.
Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased
to the revised estimate of its recoverable amount, but only to the extent that the increased carrying amount does not
exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or
cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss.
At the end of each reporting period, the Group reviews the carrying amounts of its non-financial assets to determine
whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the
recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is
not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of
the cash-generating unit to which the asset belongs.
