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135
Financial
Statements
& Others
Gamuda Berhad (29579-T)
Annual Report 2013
2. Summary of significant accounting policies (cont’d.)
2.11 Investment properties (cont’d.)
Investment properties are derecognised when either they have been disposed of or when the investment
property is permanently withdrawn from use and no future economic benefit is expected from its disposal.
Any gain or loss on the retirement or disposal of an investment property is recognised in profit or loss in the
year of retirement or disposal.
Transfers are made to or from investment property only when there is a change in use. When an entity uses
the cost model, transfers between investment property, owner-occupied property and inventories do not
change the carrying amount of the property transferred and they do not change the cost of that property for
measurement or disclosure purposes.
2.12 Service concession arrangements
The Group recognises revenue from the construction and upgrading of the infrastructure in accordance with
its accounting policy for construction contracts set out in Note 2.14. Where the Group performs more than
one service under the arrangement, consideration received or receivable is allocated to the components by
reference to the relative fair values of the services delivered, when the amounts are separately identifiable.
The Group recognises the consideration received or receivable as a financial asset to the extent that it has an
unconditional right to receive cash or another financial asset for the construction services. Financial assets
are accounted for in accordance with the accounting policy set out in Note 2.23.
The Group recognises the consideration receivable as an intangible asset to the extent that it receives a right
to charge users of the public service. Intangible assets are accounted for in accordance with the accounting
policy set out in Note 2.9.
Subsequent costs and expenditures related to infrastructure and equipment arising from the Group’s
commitments to the concession contracts or that increase future revenue are recognised as additions to the
intangible asset and are stated at cost. Capital expenditures necessary to support the Group’s operation as
a whole are recognized as property, plant and equipment, and accounted for in accordance with the policy
stated under property, plant and equipment in Note 2.10. When the Group has contractual obligations that
it must fulfill as a condition of its license to: a) maintain the infrastructure to a specified standard or, b) to
restore the infrastructure when the infrastructure has deteriorated below a specified condition, it recognises
and measures these contractual obligations in accordance with the accounting policy for provisions in Note
2.18. Repairs and maintenance and other expenses that are routine in nature are expensed and recognised
in profit or loss as incurred.
2.13 Land held for property development and property development costs
i.
Land held for property development
Land held for property development consists of land where no development activities have been carried out
or where development activities are not expected to be completed within the normal operating cycle. Such
land is classified within non-current assets and is stated at cost less any accumulated impairment losses.
The policy for the recognition and measurement of impairment losses is in accordance with Note 2.15.
Land held for property development is reclassified as property development costs at the point when
development activities have commenced and where it can be demonstrated that the development
activities can be completed within the normal operating cycle.
Notes to the Financial Statements
31 July 2013