Notes to the Financial Statements
(Cont’d)
For the year ended 30 April 2015
(In Singapore Dollars)
ANNUAL REPORT 2015
46
BUILDING ON OUR EXTENSIVE NETWORK
2.
Summary of significant accounting policies (cont’d)
2.7
Property, plant and equipment (cont’d)
The initial cost of property, plant and equipment comprises its net purchase price after deducting for
any trade discount and rebates, including import duties and non-refundable purchase taxes, any directly
attributable costs of bringing the asset to its working condition and location for its intended use. The costs
of dismantling and removing the item and restoring the site on which it is located, the obligation for which
an entity incurs either when the item is acquired or as a consequence of having used the item during
a particular period of purposes other than to produce inventories during that period are capitalised.
Expenditure incurred after the property, plant and equipment have been put into operation, such as
repairs and maintenance and overhaul costs, is normally charged to profit or loss in the period in which
the costs are incurred.
In situations where it can be clearly demonstrated that the expenditure has resulted in an increase in
the future economic benefits expected to be obtained from the use of an item of property, plant and
equipment beyond its originally assessed standard of performance, the expenditure is capitalised as an
additional cost of property, plant and equipment.
Depreciation is calculated so as to write off the cost of the assets on a straight line basis over the
estimated useful lives of the assets concerned.The principal rates used for this purpose are:
Leasehold land and buildings
– over their lease period, ranging from 1.7% to 5.6% per annum
Leasehold improvements
– 5% to 10% per annum
Motor vehicles
– 20% per annum
Plant and equipment
– 10% to 20% per annum
Computer hardware and software – 33 % per annum
Furniture and fittings
– 10% per annum
Freehold land has an unlimited useful life and is therefore not depreciated. No depreciation is provided for
construction-in-progress until it is completed and available for use.
Depreciation expense is charged in profit or loss up to the month of disposal or write-off. Fully depreciated
assets are retained in the financial statements until they are no longer in use.
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 residual value, useful life and depreciation method are reviewed at the end of each reporting period
to ensure that the amount, method and period of depreciation are consistent with the expected pattern
of consumption of the future economic benefits embodied in the items of property, plant and equipment
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 arising on de-recognition of the asset is
included in profit or loss in the year the asset is derecognised.
