Change - S P Setia Berhad

88
Annual report 2008
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2008
1. SIGNIFICANT ACCOUNTING POLICIES (cont’d)
(j)
Property, plant and equipment (cont’d)
(ii)
Depreciation
Freehold land and capital work-in-progress are not depreciated.
Depreciation is calculated to write off the depreciable amount of other property, plant and equipment on a straight-line
basis over their estimated useful lives. The depreciable amount is determined after deducting residual value from cost.
The principal annual rates used for this purpose are:
Freehold buildings 1% – 2%
Plant, machinery, cranes and trucks 20%
Office equipment, renovations, furniture and fittings 10% – 40%
Motor vehicles 16%
The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each balance
sheet date.
(k)
Investment properties
Investment properties are properties held to earn rental income or for capital appreciation or both rather than for use in the
production or supply of goods and services or for administrative purposes, or sale in the ordinary course of business.
(i)
Measurement basis
Investment properties are stated at cost less accumulated depreciation and impairment losses, if any.
The cost of investment properties includes expenditure that is directly attributable to the acquisition of the asset.
Subsequent costs are included in the asset’s carrying amount when it is probable that future economic benefits
associated with the asset will flow to the Group and the Company and the cost of the asset can be measured reliably.
The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to the income
statement during the financial year in which they are incurred.
Investment properties are derecognised upon disposal or when they are permanently withdrawn from use and no future
economic benefits are expected from their disposal. On disposal, the difference between the net disposal proceeds
and the carrying amount is recognised in the income statement.
(ii)
Depreciation
Freehold land is not depreciated.
Depreciation is calculated to write off the depreciable amount of other investment properties on a straight-line basis
over their estimated useful lives. Depreciable amount is determined after deducting the residual value from the cost of
the investment property.
The principal annual rates used for this purpose are:
Freehold buildings 2%
Leasehold buildings
Over the remaining period of the lease
The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each balance
sheet date.