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Gamuda Berhad (29579-T) • Annual Report 2012
3.
Significant accounting estimates and judgements (cont’d.)
(a)
Depreciation and impairment of property, plant and equipment (cont’d)
The carrying amount of the Group’s property, plant and equipment at the reporting date is disclosed in Note
12. A 5% difference in the expected useful lives of these assets from management’s estimates would result in
approximately RM11,000,000 (2011: RM12,000,000) variance in the Group’s profit for the year.
The Group also carried out impairment test, which required the estimation of the value-in-use of certain
property, plant and equipment.
(b)
Amortisation of motorway development expenditure (“MDE”)
The cost of MDE is amortised over the concession period by applying the following formula:
The denominator of the formula includes projected total toll revenue for subsequent years and is based on the
latest available base case traffic volume projections prepared by independent traffic consultants multiplied by
the toll rates in accordance with the Concession Agreement. The assumptions to arrive at the traffic volume
projections take into consideration the growth rate based on current market and economical conditions.
Changes in the expected traffic volume could impact future amortisation charges.
The carrying amount of the Group’s motorway development expenditure at the reporting date is disclosed in
Note 16. A 5% difference in the projected total toll revenue for the remaining concession from management’s
estimates would result in approximately RM452,000 (2011: RM225,000) variance in the Group’s profit for the
year.
(c)
Amount due from/(to) customers for construction contracts and property development
The Group and the Company recognise contract or property development revenue and expenses in the profit
or loss by using the stage of completion method. The stage of completion is determined by the proportion that
contract or property development costs incurred for work performed to date compared to the estimated total
contract or property development costs.
Significant judgement is involved in determining the stage of completion, the extent of the contract or property
development costs incurred, the estimated total contract or property development revenue and costs, as well
as the recoverability of the contracts or development projects. In making the judgement, the Group evaluates
based on past experience and by relying on the work of specialists.
Where the total actual revenue and cost incurred are different from the total estimated revenue and cost
incurred, such differences will impact the contract profit or losses recognised.
The carrying amount of the Group’s property development costs at the reporting date is disclosed in Note
13(b). A 5% difference in the estimated total property development cost would result in approximately 5%
(2011: 5%) variance in the Group’s profit for the year.
X
Cumulative
Actual MDE
Less
Accumulated
amortisation at
beginning of the
financial year
Cumulative Actual Toll Revenue to date
(Cumulative Actual Toll Revenue to date + Projected
Total Toll Revenue for the remaining Concession)
NoTES To ThE FINANCIAL STATEMENTS
31 July 2012