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Glorious Property
98
Annual Report 2011
Notes to the Consolidated Financial Statements
(Continued)
31 December 2011
2 Summary of Significant Accounting Policies
(Continued)
(d) PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are stated at historical cost less accumulated depreciation and any impairment
losses. Historical cost includes expenditure that is directly attributable to the acquisition of the items. Subsequent
costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is
probable that future economic benefits associated with the item will flow to the Group and the cost of the item can
be measured reliably.
Repairs and maintenance are expensed in the consolidated statement of comprehensive income during the financial
period in which they are incurred.
Depreciation on property, plant and equipment is calculated using the straight-line method to allocate their costs to
their residual values over their estimated useful lives, as follows:
Building
The shorter of remaining lease term or useful lives
Computer and office equipment
5 years
Motor vehicles
5 years
Furniture, fitting and equipment
5 years
Plant and machinery
10 years
Leasehold improvements
Over the lease terms of 1 to 5 years
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting
period.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is
greater than its estimated recoverable amount (note 2(g)).
Gains and losses on disposals are determined by comparing proceeds with carrying amount and are recognised
within “administrative expenses” in the consolidated statement of comprehensive income.
Construction in progress are stated at historical cost less impairment losses. Historical cost includes expenditure
that is directly attributable to the development of the properties which comprises land use rights, construction costs,
borrowing costs and professional fees incurred during the development period. On completion, the properties are
transferred to building within property, plant and equipment.
No depreciation is provided for construction in progress. The carrying amount of properties under construction is
written down immediately to its recoverable amount if the assets carrying amount are greater than their estimated
recoverable amount (note 2(g)).