2008 Annual Report - Kenford Group Holdings Limited

Notes to the Financial Statements
For the year ended 31 March 2008
4. PRINCIPAL ACCOUNTING POLICIES (Continued)
(d) Property, plant and equipment
Property, plant and equipment are stated at cost or valuation less accumulated depreciation and accumulated
impairment losses.
Certain leasehold land and buildings in Hong Kong and leasehold buildings in the PRC components held for use
in the production or for administrative purpose are stated in the balance sheet at their revalued amounts being the
fair value on the basis of their existing use at the date of valuation, less any subsequent accumulated depreciation
and subsequent accumulated impairment losses. Revaluations are performed with suffi cient regularity such that
the carrying amounts do not differ materially for that which would be determined using fair values at the balance
sheet date.
Any revaluation increase arising on the revaluation of such property is credited to the properties revaluation reserve,
except to the extent that it reverses a revaluation decrease for the same asset previously recognised as an expense,
in which case the increase is credited to the consolidated income statement to the extent of the decrease previously
charged. A decrease in carrying amount arising on the revaluation of property is charged as an expense to the
extent it exceeds the balance, if any, held in the properties revaluation reserve relating to the previous revaluation
of that asset.
Upon disposal, the relevant portion of the properties revaluation reserve realised in respect of previous valuations is
released from the properties revaluation reserve to retained profi ts.
Property, plant and equipment are depreciated so as to write off their cost or valuation net of expected residual value
over their estimated useful lives on a straight-line basis. The useful lives, residual value and depreciation method
are reviewed, and adjusted if appropriate, at each balance sheet date. The estimated useful lives are as follows:
Leasehold land and buildings in Hong Kong
Leasehold buildings in the PRC
Leasehold improvements
Plant and machinery
Fixtures, furniture and equipment
Motor vehicles
Moulds
42 years
20-45 years
The shorter of the lease terms or 5 years
10 years
5 years
5 years
5 years
The asset’s carrying amount is written down immediately to its recoverable amount if its carrying amount is greater
than the asset’s estimated recoverable amount.
Construction in progress represents buildings on which construction work has not been completed. Construction
in progress is carried at cost which include development and construction expenditure incurred and interest and
other direct costs attributable to the development less any accumulated impairment losses. No depreciation is
provided in respect of construction in progress until it is completed and is ready for its intended use. On completion,
constructions in progress are transferred to the appropriate category of property, plant and equipment. Depreciation
of these assets, on the same basis as other property assets, commences when the assets are ready for intended
use.
The gain or loss on disposal of an item of property, plant and equipment other than leasehold building is the
difference between the net sale proceeds and the carrying amount of the relevant asset, and is recognised in the
consolidated income statement.
44 KENFORD GROUP HOLDINGS LIMITED