SEC Form 17-A: Annual Report - the solid group inc website

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(d)
Estimating Useful Lives of Property, Plant and Equipment
The Group estimates the useful lives of property, plant and equipment based on
the period over which the assets are expected to be available for use. The
estimated useful lives of property, plant and equipment are reviewed periodically
and are updated if expectations differ from previous estimates due to physical wear
and tear, technical/commercial obsolescence and legal or other limits on the use of
the assets. The carrying amounts of property, plant and equipment are analyzed in
Note 12. Based on management’s assessment as at December 31, 2012, and 2011,
no change in the estimated useful lives of property, plant and equipment during
those years occurred. Actual results, however, may vary due to changes in
estimates brought about by changes in factors mentioned above.
(e)
Determining Net Realizable Value of Properties Under Development
Management’s assessment of net realizable value of properties under development
requires the estimates of future cash flows to be derived from these properties.
These estimates require judgment as to the anticipated sale prices by reference to
recent sales transactions in nearby locations, rate of new property sales, marketing
costs (including price discounts required to stimulate sales) and the expected costs
to completion of properties, the legal and regulatory framework and general market
conditions.
(f)
Determining Realizable Amount of Deferred Tax Assets
The Group reviews its deferred tax assets at the end of each reporting period
and reduces the carrying amount to the extent that it is no longer probable
that sufficient taxable profit will be available to allow all or part of the deferred
tax asset to be utilized. The carrying value of deferred tax assets, which
management assessed may be fully utilized within the next two to five years, as
of December 31, 2012 and 2011 is disclosed in Note 23.2.
(g)
Impairment of Non-financial Assets
The Group’s policy on estimating the impairment of non-financial assets is
discussed in Note 2.18. Though management believes that the assumptions used
in the estimation of fair values reflected in the consolidated financial statements
are appropriate and reasonable, significant changes in these assumptions may
materially affect the assessment of recoverable values and any resulting
impairment loss could have a material adverse effect on the results of operations.
Based on management’s assessment, there were no impairment losses recognized
on other non-financial assets in 2012, 2011 and 2010.
(h)
Estimating Liability for Land and Land Development Costs
The Group’s liability for land and development cost for future development is
determined by technical staff based on updated budgets and available information
and circumstances, as well as its previous experience. The amount of estimated
liability for land and development costs as of December 31, 2012 and 2011 is
disclosed in Note 11.