Annual Report 2013 - Mainfreight

2 Summary of Significant Accounting Policies (continued)
(j)
Investments in Associates
The Group’s investment in its associates is accounted for using the equity method of accounting in the consolidated financial statements
and at cost in the Parent. The associates are entities over which the Group has significant influence and that are neither subsidiaries
nor joint ventures. The Group generally deems it has significant influence if they have over 20% of the voting rights.
Under the equity method, investments in the associates are carried in the consolidated balance sheet at cost plus post-acquisition
changes in the Group’s share of net assets of the associates. Goodwill relating to an associate is included in the carrying amount of the
investment and is not amortised. After application of the equity method, the Group determines whether it is necessary to recognise any
impairment loss with respect to the Group’s net investment in associates.
The Group’s share of its associates’ post-acquisition profits or losses is recognised in the income statement, and its share of postacquisition
movements in reserves is recognised in reserves. The cumulative post-acquisition movements are adjusted against the
carrying amount of the investment. Dividends receivable from associates are recognised in the Parent’s income statement, while in the
consolidated financial statements they reduce the carrying amount of the investment.
When the Group’s share of losses in an associate equals or exceeds its interest in the associate, including any unsecured long-term
receivables and loans, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of
the associate.
The reporting dates of the associates and the Group are identical and the associates’ accounting policies conform to those used by the
Group for like transactions and events in similar circumstances.
(k) Property, Plant and Equipment
Property, plant and equipment, except land, is stated at historical cost less accumulated depreciation and any accumulated impairment
losses. Such cost includes the cost of replacing parts that are eligible for capitalisation when the cost of replacing the parts is incurred.
All other repairs and maintenance are recognised in profit or loss as incurred.
Land is measured at fair value, based on annual valuations by external independent valuers who apply the International Valuation
Standards Committee International Valuation Standards, less any impairment losses recognised after the date of the revaluation.
Depreciation is calculated on a straight-line basis at rates calculated to allocate the assets’ cost, less estimated residual value, over their
estimated useful lives as follows:
Per annum
Land
not depreciated
Buildings 2% to 3%
Leasehold Improvements 10% or life of lease if shorter
Furniture & Fittings 10% to 20%
Motor Cars 26% to 31%
Plant and Equipment 10% to 25%
Computer Hardware 28% to 36%
The assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each financial year end.
Revaluations of Land
Revaluations increment is credited to other comprehensive income and accumulated in the asset revaluation reserve except to the
extent that it reverses a revaluation decrease of the same asset previously recognised in profit or loss, in which case the increase is
recognised in profit or loss.
Any revaluation decrement is recognised in profit or loss, except to the extent that it offsets a previous revaluation increase for the
same asset, in which case the decrease is debited directly to other comprehensive income to the extent of the credit balance existing
in the revaluation reserve for that asset.
Upon disposal or de-recognition, any revaluation reserve relating to the particular asset being sold is transferred to retained earnings.
Disposal
An item of property, plant and equipment is derecognised upon disposal or when no further future economic benefits are expected from
its use or disposal.
Any gain or loss arising on de-recognition of the asset (calculated as the difference between the net disposal proceeds and the
carrying amount of the asset) is included in profit or loss in the year the asset is derecognised.
76 Mainfreight | Annual Report 2013