for the year ended 31 December 2016
NOTES TO THE
FINANCIAL STATEMENTS
Annual Report 2016
-
90
-
2.
Summaryofsignificantaccountingpolicies (cont’d)
2.6
Property, plant and equipment
All items of property, plant and equipment are initially recorded at cost. Subsequent to recognition, property,
plant and equipment other than freehold land andbuilding aremeasured at cost less accumulateddepreciation
and any accumulated impairment losses.
The cost includes the cost of replacing part of the property, plant and equipment and borrowing costs that
are directly attributable to the acquisition, construction or production of a qualifying property, plant and
equipment. The cost of an item of property, plant and equipment is recognised as an asset if, and only if, it is
probable that futureeconomicbenefits associatedwith the itemwill flow to theGroupand thecost of the item
can bemeasured reliably.
When significant parts of property, plant and equipment are required to be replaced in intervals, the Group
recognises such parts as individual assetswith specific useful lives and depreciation, respectively. Likewise,
whenamajor inspection isperformed, its cost is recognised in thecarryingamount of theplant andequipment
as a replacement if the recognition criteria are satisfied.All other repair andmaintenance costs are recognised
in profit or loss as incurred.
Depreciation of an asset beginswhen it is available for use and is computed on a straight-line basis over the
estimated useful life of the asset as follows:
Leasehold land and buildings
– over remaining terms of lease
Leasehold improvements
– 5 to 7 years
Furniture and fittings
– 5years
Office equipment
– 3 to 5 years
Motor vehicles
– 4 to 5 years
Plant and equipment
– 3 to 10 years
Assets under construction are not depreciated as these assets are not yet available for use.
Fully depreciated assets still in use are retained in the financial statements until they are no longer in use and
no further charge for depreciation ismade in respect of these assets.
The carrying value of property, plant and equipment are reviewed for impairment when events or changes in
circumstances indicate that the carrying valuemay not be recoverable.
The residual value, useful life and depreciationmethod are reviewed at each financial year-end and adjusted
prospectively, if appropriate.
An itemof property, plant and equipment is derecognisedupondisposal orwhenno future economic benefits
are expected from its use or disposal.Any gain or loss arising on derecognition of the asset is included in the
profit or loss in the year the asset is derecognised.
