Annual Report 2011 (Part I) - Wawasan TKH Holdings Berhad

WAWASAN TKH HOLDINGS BERHAD (540218-A) • ANNUAL REPORT 2011
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NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2011 (cont’d)
4. SIGNIFICANT ACCOUNTING POLICIES (cont’d)
4.3 Business combinations (cont’d)
Business combinations before 1 January 2011 (cont’d)
(a)
reassess the identification and measurement of the acquiree’s identifiable assets, liabilities and
contingent liabilities and the measurement of the cost of the business combination; and
(b) recognise immediately in profit or loss any excess remaining after that reassessment.
When a business combination includes more than one exchange transaction, any adjustment to the fair
values of the subsidiary’s identifiable assets, liabilities and contingent liabilities relating to previously held
interests of the Group is accounted for as a revaluation.
4.4 Property, plant and equipment and depreciation
All items of property, plant and equipment are initially measured at cost. Cost includes expenditure that
is directly attributable to the acquisition of the asset.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as
appropriate, only when the cost is incurred and it is probable that the future economic benefits associated
with the asset will flow to the Group and the cost of the asset can be measured reliably. The carrying
amount of parts that are replaced is derecognised. The costs of the day-to-day servicing of property,
plant and equipment are recognised in profit or loss as incurred. Cost also comprises the initial estimate
of dismantling and removing the asset and restoring the site on which it is located for which the Group is
obligated to incur when the asset is acquired, if applicable.
Each part of an item of property, plant and equipment with a cost that is significant in relation to the total
cost of the asset and which has different useful life, is depreciated separately.
After initial recognition, property, plant and equipment, except for land and buildings, are stated at cost
less any accumulated depreciation and any accumulated impairment losses. The land and buildings are
stated at valuation, which is the fair value at the date of revaluation less any subsequent accumulated
depreciation and subsequent accumulated impairment losses.
The land and buildings are revalued with sufficient regularity to ensure that the carrying amount does not
differ materially from that which would be determined using fair value at the end of the reporting period.
The surplus arising from such revaluations is credited to shareholders’ equity as a revaluation reserve,
net of deferred tax, if any, and any subsequent deficit is offset against such surplus to the extent of a
previous increase for the same property. In all other cases, the deficit will be charged to profit or loss. For
a revaluation increase subsequent to a revaluation deficit of the same asset, the surplus is recognised as
income to the extent that it reverses the deficit previously recognised as an expense with the balance of
increase credited to revaluation reserve.
At the commencement of the lease term, leasehold land classified as finance leases shall be recognised at
amounts equal to the fair value of the leased property or, if lower, the present value of the minimum lease
payments, each determined at the inception of the lease. Any initial direct costs are added to the amount
recognised as an asset.
Depreciation is calculated to write off the cost or valuation of the assets to their residual values on a
straight line basis over their estimated useful lives. The estimated useful lives are as follows:
Buildings
Short term leasehold land
Furniture, fittings and office equipment
Motor vehicles
Plant and machinery, tools and factory equipment, roads and
bridges, mould and electrical installation
Renovation
28 - 50 years
30 years
2 - 10 years
5 years
10 - 16.67 years
10 years
Freehold land has unlimited useful life and is not depreciated.