notes to the financial statements - Food Empire Holdings Limited

NOTES TO THE FINANCIAL STATEMENTS (cont’d)
For the year ended 31 December 2012
2. Summary of significant accounting policies (cont’d)
2.10 Investment properties
Investment properties are properties that are owned by the Group in order to earn rentals or for capital appreciation, or both, rather
than for use in the production or supply of goods or services, or for administrative purposes, or in the ordinary course of business.
Investment properties comprise completed investment properties and properties that are being constructed or developed for future
use as investment properties.
Investment properties are initially recorded at cost, including transaction costs. The carrying amount includes the cost of replacing
part of an existing investment property at the time that cost is incurred if the recognition criteria are met.
Depreciation is calculated using straight-line method to allocate the depreciable amounts over the estimated useful lives of 50 years.
The residual values, useful lives and depreciation method of investment properties are reviewed, and adjusted as appropriate, at each
balance sheet date. The effects of any revision are included in profit or loss when the changes arise.
Investment properties are derecognised when either they have been disposed of or when the investment property is permanently
withdrawn from use and no future economic benefit is expected from its disposal. Any gain or loss on the retirement or disposal of
an investment property is recognised in profit or loss in the year of retirement or disposal.
Transfers are made to or from investment property only when there is a change in use. For a transfer from investment property to
owner-occupied property, the deemed cost for subsequent accounting is the fair value at the date of change in use. For a transfer
from owner-occupied property to investment property, the property is accounted for in accordance with the accounting policy for
property, plant and equipment set out in Note 2.9 up to the date of change in use.
2.11 Intangible assets
(a)
Goodwill
Goodwill is initially measured at cost. Following initial recognition, goodwill is measured at cost less any accumulated
impairment losses.
For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to
each of the Group’s cash-generating units that are expected to benefit from the synergies of the combination, irrespective of
whether other assets or liabilities of the acquiree are assigned to those units.
The cash-generating unit to which goodwill has been allocated is tested for impairment annually and whenever there is an
indication that the cash-generating unit may be impaired. Impairment is determined for goodwill by assessing the recoverable
amount of each cash-generating unit (or group of cash-generating units) to which the goodwill relates. Where the recoverable
amount of the cash-generating unit is less than the carrying amount, an impairment loss is recognised in profit or loss.
Impairment losses recognised for goodwill are not reversed in subsequent periods.
Where goodwill forms part of a cash-generating unit and part of the operation within that cash-generating unit is disposed of,
the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining
the gain or loss on disposal of the operation. Goodwill disposed of in this circumstance is measured based on the relative fair
values of the operations disposed of and the portion of the cash-generating unit retained.
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