Hatching For The Future - teo seng capital berhad

Teo Seng Capital Berhad
Notes To The Financial Statements
For The Financial Year Ended 31 March 2012
4.
ACCOUNTING POLICIES AND STANDARDS (cont’d)
4.2
Summary of Significant Accounting Policies (cont’d)
(c) Property, plant and equipment and depreciation (cont’d)
Surpluses arising on revaluation are recognised in other comprehensive income and accumulated in equity
under the revaluation reserve. Any deficit arising from revaluation is charged against the revaluation reserve to
the extent of a previous surplus held in the revaluation reserve for the same property, plant and equipment. In
all other cases, a decrease in carrying amount is charged to profit or loss. Subsequent to revaluation, any
addition is stated at cost whilst disposal is stated at cost or valuation as appropriate.
Freehold land is not depreciated whilst capital work-in-progress are not depreciated until they are completed
and put into use. Leased assets are depreciated over the shorter of the lease term and their useful lives
unless it is reasonably certain that the Group will obtain ownership by the end of the lease term. Other
property, plant and equipment are depreciated on a straight-line basis to write off the cost of each asset to its
residual value over the estimated useful lives. Depreciation of an asset does not cease when the asset
becomes idle or is retired from active use unless the asset is fully depreciated. The principal annual rates of
depreciation used are as follows :
Farm and poultry buildings 2% - 20%
Factory buildings 1% - 2%
Fish pond and equipment 2% - 10%
Plant and machinery 5% - 20%
Egg layer conveyor and cages system 5%
Motor vehicles, electrical installation, furniture, fittings, equipment, renovation and hostel 2% - 33.3%
The residual values, useful lives and depreciation method are reviewed at the end of each reporting period to
ensure that the amount, method and period of depreciation are consistent with previous estimates and the
expected pattern of consumption of the future economic benefits embodied in the items of property, plant
and equipment.
The carrying amounts of property, plant and equipment are reviewed for impairment when events or changes
circumstances indicate that the carrying amounts may not be recoverable. The policy for the recognition and
measurement of impairment losses is in accordance with Note 4.2(f)(ii).
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits
are expected from its use. The difference between the net disposal proceeds, if any, and the carrying amount
is recognised in profit or loss and the unutilised portion of the revaluation surplus on that item, if any, is
transferred directly to retained profits.
(d)
(e)
Assets under hire purchase
Assets acquired under hire purchase are capitalised in the financial statements and are depreciated in
accordance with the policy set out in Note 4.2(c) above. Each hire purchase payment is allocated between the
liability and finance charges so as to achieve a constant rate on the finance balance outstanding. Finance
charges are recognised in profit or loss over the period of the respective hire purchase agreements.
Investment property
Investment property is property held either to earn rental income or for capital appreciation or for both.
Initially, investment property is measured at cost including transaction costs, less accumulated depreciation
and impairment losses, consistent with the accounting policy for property, plant and equipment.
Annual Report 2012
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