140 / 212
REPORTS
4 SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
4.3 Property, plant and equipment
Recognition and measurement
All items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated
impairment losses. Cost includes expenditure that is directly attributable to the acquisition of the asset.
When parts of an item of property, plant and equipment have different useful lives, they are accounted for as
separate items (major components) of property, plant and equipment.
The gain or loss on disposal of an item of property, plant and equipment (calculated as the difference between the
net proceeds from disposal and the carrying amount of the item) is recognised in profit or loss or the statement of
total return (as the case may be).
Subsequent costs
The cost of replacing a component of an item of property, plant and equipment is recognised in the carrying
amount of the item if it is probable that the future economic benefits embodied within the component will flow
to the Stapled Group, and its cost can be measured reliably. The carrying amount of the replaced component is
derecognised. The costs of the day-to-day servicing of property, plant and equipment are recognised in profit or
loss or the statement of total return (as the case may be) as incurred.
Depreciation
Depreciation is based on the cost of an asset less its residual value. Significant components of individual assets are
assessed and if a component has a useful life that is different from the remainder of that asset, that component is
depreciated separately.
Depreciation is recognised as an expense in profit or loss or the statement of total return (as the case may be) on a
straight-line basis over the estimated useful lives of each component of an item of property, plant and equipment,
unless it is included in the carrying amount of another asset. Freehold land and capital work-in-progress are not
depreciated.
Depreciation is recognised from the date that the property, plant and equipment are installed and are ready for use.
The estimated useful lives for the current year is as follows:
• leasehold land
The remaining useful lives of land lease
• buildings
50 years or 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 and computers
5 years
Depreciation methods, useful lives and residual values are reviewed at the end of each reporting period and adjusted
if appropriate.
4.4 Prepaid land lease
Prepaid land lease relates to upfront payment on long-term leasehold interest in land. The payment is stated at cost
and amortised on a straight-line basis over the period of the lease.
NOTES TO THE FINANCIAL STATEMENTS
138