WE MAKE THINGS HAPPEN

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Hyflux Ltd annual report 2008
Notes to the Financial Statements (cont’d)
As at 31 December 2008
2 Summary of significant accounting policies (cont’d)
2.5 Intangible assets (cont’d)
Research and development costs
Expenditure on research activities, undertaken with the prospect of gaining new scientific or technical knowledge
and understanding, is recognised in the income statement as an expense when it is incurred.
Development activities involve a plan or design for the production of new or substantially improved products
and processes. Development expenditure is capitalised only if development costs can be measured reliably,
the products or process is technically and commercially feasible, future economic benefits are probable, and
the Group intends to and has sufficient resources to complete development and to use or sell the asset.
The expenditure capitalised includes the cost of materials, direct labour and overhead costs that are directly
attributable to preparing the asset for its intended use. Other development expenditure is recognised in the
income statement as an expense when it is incurred.
Capitalised development expenditure is stated at cost less accumulated amortisation and impairment losses.
Amortisation is charged to the income statement using the straight-line method over the estimated useful lives
of not more than 15 years, from the date on which they are available for use.
Capitalised development expenditure that is not available for use is reviewed for impairment annually or as and
when indicators of impairment are identified as described in note 2.9.
Other intangible assets
Other intangible assets with finite useful lives are measured at cost less accumulated amortisation and
impairment losses. They are amortised in the income statement on a straight-line basis over their estimated
useful lives ranging from 10 to 20 years, from the date on which they are available for use.
Other intangible assets that are not available for use are tested for impairment annually or as and when indicators
of impairment are identified as described in note 2.9.
Subsequent expenditure
Subsequent expenditure on capitalised intangible assets is capitalised only when it increases the future economic
benefits embodied in the specific asset to which it relates. All other expenditure is expensed as incurred.
2.6 Investment properties
Investment properties are properties held either to earn rental income or capital appreciation or both. They do
not include properties for sale in the ordinary course of business, used in the production or supply of goods or
services, or for administrative purposes.
Investment properties are measured at cost less accumulated depreciation and impairment losses. Rental
income from investment properties is accounted for in the manner described in note 2.14.
Depreciation on investment properties is recognised in the income statement on a straight-line basis over the
lease terms.
Depreciation methods, useful lives and residual values are reviewed, and adjusted as appropriate, at each
reporting date.