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Gamuda Berhad (29579-T) • Annual Report 2012
2.
Summary of significant accounting policies (cont’d.)
2.10 Property, plant and equipment and depreciation (cont’d.)
Subsequent to recognition, property, plant and equipment except for freehold land are stated at cost less
accumulated depreciation and any accumulated impairment losses. When significant parts of property, plant
and equipment are required to be replaced in intervals, the Group recognises such parts as individual assets
with specific useful lives and depreciation, respectively. Likewise, when a major inspection is performed, its
cost is recognised in the carrying amount of the plant and equipment as a replacement if the recognition
criteria are satisfied. All other repair and maintenance costs are recognised in profit or loss as incurred.
Freehold land has an unlimited useful life and therefore is not depreciated. Depreciation of other property,
plant and equipment is provided for on a straight line basis to write off the cost or valuation of each asset to
its residual value over the estimated useful life, at the following annual rates:
Buildings
2%
Plant, machinery and golf, gym and club house equipment
12% - 33%
office equipment, furniture and fittings
10% - 33%
Motor vehicles
12% - 25%
Certain land and buildings of the Group and of the Company have not been revalued since they were first
revalued in 1991. The directors have not adopted a policy of regular revaluation of such assets. As permitted
under the transitional provision of FRS116
2004
: Property, Plant and Equipment, these assets continue to be
stated at their 1991 valuation less accumulated depreciation and impairment losses.
The carrying values of property, plant and equipment are reviewed for impairment when events or changes
in circumstances indicate that the carrying value may not be recoverable. The policy for the recognition and
measurement of impairment losses is in accordance with Note 2.15.
The residual value, useful life and depreciation method are reviewed at each financial year-end, and adjusted
prospectively, if appropriate.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits
are expected from its use or disposal. Any gain or loss on derecognition of the asset is included in profit or loss
in the year the asset is derecognised.
2.11 Investment properties
Investment properties consist of land and buildings which are held either to earn rental income or for capital
appreciation or for both. Such properties are initially measured at cost, including transaction costs. Subsequent
to initial recognition, investment properties are stated at cost less accumulated depreciation and impairment
losses. The depreciation policy for investment properties is consistent with that for depreciable property, plant
and equipment as described in Note 2.10. The policy for the recognition and measurement of impairment
losses is in accordance with Note 2.15.
NoTES To ThE FINANCIAL STATEMENTS
31 July 2012