notes to financial statements - the grande holdings limited

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3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)GoodwillGoodwill arising on acquisitions prior to 1 January 2001 is held in reserves and willbe charged to the income statement at the time of disposal of the relevant subsidiaryor associate, or at such time as the goodwill is determined to be impaired. Goodwillarising on acquisitions after 1 January 2001 is capitalised and amortised over itsestimated useful life but not more than 20 years.notes tofinancial statements31 December 2003Negative goodwillNegative goodwill arising on acquisitions prior to 1 January 2001 is held in reservesand will be credited to the income statement at the time of disposal of the relevantsubsidiary or associate. Negative goodwill arising on acquisitions after 1 January2001 is presented as a deduction from assets and will be released to income basedon an analysis of the circumstances from which the balance resulted.Segment reportingA segment is a distinguishable component of the Group that is engaged either inproviding products or services (business segment), or in providing products or serviceswithin a particular economic environment (geographical segment), which is subject torisks and rewards that are different from those of other segments.In accordance with the Group’s internal management reporting, the Group hasdetermined that business segments be presented as the primary reporting format andgeographical as the secondary reporting format. Inter-segment transfer pricing is basedon cost plus an appropriate margin.Segment revenue, expenses, results, assets and liabilities include items directlyattributable to a segment as well as those that can be allocated on a reasonablebasis to that segment. Segment revenue, expenses, assets and liabilities aredetermined before inter-segment balances and inter-segment transactions areeliminated as part of the consolidation.Segment capital expenditure is the total cost incurred during the period to acquiresegment assets that are expected to be used for more than one period.33
34notes tofinancial statements31 December 20033. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)Property, plant and equipmentProperty, plant and equipment are stated at cost or valuation less accumulateddepreciation and impairment losses, except for freehold land which is stated at costless impairment loss and is not depreciated. Surpluses arising on revaluation arecredited directly to reserves, except that a revaluation increase is recognised asincome to the extent that it reverses a revaluation decrease of the same assetpreviously recognised as an expense.In accordance with the transitional provisions set out in paragraph 80 of Statementsof Standard Accounting Practice (“SSAP”) 17 (revised), “Property, plant and equipment”issued by the Hong Kong Society of Accountants in 1995, subsequent revaluations ofthe leasehold land and buildings of the Group, which have been carried at revaluedamounts prior to 30 September 1995, will not be undertaken on a regular basis.Depreciation is calculated on the straight-line basis to write off the cost or valuation ofeach asset over its estimated useful life as set out below:Freehold buildings outside Hong KongLong term leasehold land outside Hong KongLong term leasehold buildings outside Hong KongMedium term leasehold land and buildings in Hong KongMedium term leasehold land and buildingsoutside Hong KongPlant, equipment and other assetsMoulds5 to 50 years99 years45 years20 to 40 yearsOver the lease terms2 to 15 years2 to 5 yearsThe cost of an asset comprises its purchase price and any directly attributable costsof bringing the asset to its working condition and location for its intended use.Expenditure incurred after the assets have been put into operation, such as repairsand maintenance, is normally charged as an expense in the period in which it isincurred. In situations where it can be clearly demonstrated that the expenditure hasresulted in an increase in the future economic benefits expected to be obtained fromthe use of the asset, the expenditure is capitalised as an additional cost of the asset.Upon the disposal of properties which have been revalued, the relevant portion of therevaluation reserve attributable to the properties realised is transferred directly toretained profits as a reserve movement.The gain or loss on disposal or retirement of an asset recognised in the incomestatement is the difference between the net sales proceeds and the carrying amountof the relevant asset.Properties held for saleProperties held for sale are stated at the lower of cost and net realisable value. Costincludes all costs attributable to such development, including finance charges. Nodepreciation is provided on properties held for sale.
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notes to financial statements - the grande holdings limited

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