118
CDL
HOSPITALITY TRUSTS
3 SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
3.3 Property, plant and equipment (cont'd)
Depreciation (cont'd)
The estimated useful lives for the current year is as follows:
• buildings
The remaining useful lives of land lease
• plant and machinery
10 - 12 years
• furniture and fixtures
7 years
• motor vehicles and boats
5 years
• office equipment
5 years
• computers
5 years
Capital works-in-progress are not depreciated as these assets are not yet available for use. Depreciation
methods, useful lives and residual values are reviewed at the end of each reporting period and adjusted
if appropriate.
3.4 Prepaid land lease
Prepaid land lease relates to upfront payment on long-term leasehold interests in land. These payments are
stated at cost and are amortised on a straight-line basis over the remaining term of the land lease of 43 years.
3.5 Investment properties
Investment property is property held either to earn rental income or for capital appreciation or for both, but
not for sale in the ordinary course of business, use in the production or supply of goods or services or for
administrative purposes.
Investment properties are measured at cost on initial recognition and subsequently at fair value with any
changes therein recognised in the statement of total return. The cost of a purchased property comprises its
purchase price and any directly attributable expenditure including transaction costs. Fair value is determined
in accordance with the H-REIT Trust Deed, which requires the investment properties to be valued by
independent registered valuers in the following events:
• at least once a year in accordance with the Property Funds Appendix of CIS Code issued by MAS; and
• where the H-REIT Manager proposes to issue new units for subscription or to redeem existing units
unless the investment properties have been valued not more than 6 months ago.
When an investment property is disposed of, the resulting gain or loss recognised in the statement of total
return is the difference between net disposal proceeds and the carrying amount of the property.
Investment properties are not depreciated. The properties are subject to continued maintenance and
regularly revalued on the basis set out above. For taxation purposes, the H-REIT Group may claim capital
allowances on assets that qualify as plant and machinery under the income tax laws of the countries in which
the investment properties are located.
When the use of a property changes such that it is reclassified as property, plant and equipment, its fair value
at the date of reclassification becomes its cost for subsequent accounting.
NOTES TO THE FINANCIAL STATEMENTS
