The Case Study - Seylan Bank

150Seylan Bank PLC Annual Report 2009Notes to the Consolidated Financial StatementsSeylan Developments PLCProperty, Plant & Equipment are recorded at cost of purchase or valuation together with any incidentalexpenses thereon. The assets are stated at cost or valuation less accumulated depreciation which isprovided for on the basis specified below.The property at No. 90, Galle Road, Colombo 03, which includes the leasehold land, buildings andequipment and comprises of two towers namely, East and West were revalued on open market effectivevalue basis. The surplus arising on the revaluation was transferred to revaluation reserve account.The value pertaining to the East tower is apportioned on a square feet area basis and is stated at valuationless accumulated depreciation under Property, Plant & Equipment.Depreciation of common types of assets within the Group are in line with the Group policy disclosed above.Freehold land, antiques and ornamental paintings are not depreciated. Leasehold land and buildings aredepreciated over the remaining unexpired lease period. The depreciation of other assets that are unique toSeylan Developments PLC is provided on the straight-line method at varying rates per annum based on theiruseful lives as follows:Useful Life (Years)Depreciation RateLeasehold Land 81 1.23%Building 81 1.23%Interior Decor - General 02 50%Motor Cycle 04 25%Tools 03 33.33%Cutlery & Crockery 02 50%Equipment - West Tower 02 50%Furniture - West Tower 03 33.33%Interior - West Tower 03 33.33%General Plant & Equipment 20 5%Depreciation of an asset begins when it is available for use whereas depreciation of an asset ceases at theearlier of the date that the asset is classified as held for sale and the date that the asset is derecognised.Capital Work-in-ProgressCapital work-in-progress is stated at cost. These are expenses of a capital nature directly incurred in theconstruction of buildings, major plant and machinery and system development, awaiting capitalisation.Borrowing CostsBorrowing costs that are directly attributable to the acquisition, construction or production of a qualifying assethave been capitalised as part of the cost of the asset in accordance with Sri Lanka Accounting Standard 20 -‘Borrowing Costs’. Capitalisation of borrowing costs ceases when substantially all the activities necessary toprepare the qualifying asset for its intended use are completed.1.4.9 Intangible AssetsGoodwill arising on acquisition was measured at cost and amortised previously. Other intangible assetsincluded in Note 29 has been impaired and charged to Income Statement as set out in Note 1.4.10.2.1.4.10 Impairment1.4.10.1 Financial AssetsThe Bank assesses at each Balance Sheet date whether there is objective evidence that a financial asset isimpaired. A financial asset is impaired and impairment losses are incurred if and only if, there is objectiveevidence of impairment as a result of one or more loss events that occurred after the initial recognitionof the asset and prior to the Balance Sheet date (‘a loss event’), and that loss event or events have had animpact on the estimated realisable value of the asset.