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Glorious Property
Annual Report 2011
Notes to the Consolidated Financial Statements
(Continued)
31 December 2011
2 Summary of Significant Accounting Policies
(Continued)
(e) INVESTMENT PROPERTIES
Property that is held for long-term rental yields or for capital appreciation or both and is not occupied by the Group
is classified as investment property. Land held under operating leases are classified and accounted for as investment
property when the rest of the definition of investment property is met. In such case, the operating leases are
accounted for as if they were finance leases. Investment property is carried at fair value, representing open market
value determined annually by external valuers. Fair value is based on active market prices, adjusted, if necessary,
for any difference in the nature, location or condition of the specific asset. If the information is not available, the
Group uses alternative valuation methods such as recent prices on less active markets or discounted cash flow
projections. These valuations are reviewed annually by an independent and professionally qualified valuer, changes
in fair values are recorded in the consolidated statement of comprehensive income as part of “other gains/losses,
net”.
Property that is currently being constructed or developed for future use as investment property is classified as
investment properties and stated at fair value. Where fair value of investment property under construction is not
reliably measurable, the property is measured at cost until the earlier of the date of construction is completed or the
date at which fair value becomes reliably measurable.
If an item of completed properties held for sale becomes an investment property as a result of change in its use, any
difference between the carrying amount and the fair value of this property at the date of transfer is recognised in the
consolidated statement of comprehensive income as part of “other gains/losses, net”.
(f) INTANGIBLE ASSETS
Intangible assets mainly represent the licence which was recorded at cost of acquisition on initial recognition. The
licence has a finite useful life and is carried at cost less accumulated amortisation. Amortisation is calculated using
the straight-line method to allocate the cost of licence over its estimated useful life of 5 years.
(g) IMPAIRMENT OF NON-FINANCIAL ASSETS
Assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount
may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount
exceeds its recoverable amount.
The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purpose
of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash
flows (cash-generating unit). Non-financial assets other than goodwill that suffered an impairment are reviewed for
possible reversal of the impairment at each reporting date.