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CIC INSURANCE GROUP LIMITEDNotes to the Financial Statements continuedFor the year ended 31 December 20111 ACCOUNTING POLICIES (Continued)Adoption of new and revised International Financial Reporting Standards (IFRSs) and Interpretations (IFRIC) (Continued)(c)Early adoption of standards (Continued)Each year the difference between depreciation based on the revalued carrying amount of the asset (the depreciationcharged to the profit or loss for the year) and depreciation based on the asset’s original cost is transferred from therevaluation surplus directly to the statutory reserve/retained earnings.Depreciation is calculated on the reducing balance basis to write down the cost of each asset, or the revaluedamount, to its residual value over its estimated useful life as follows:BuildingsComputersMotor vehiclesFurniture, fittings and equipment40 years4 years4 years8 yearsProperty and equipment are reviewed for impairment whenever there are any indications of impairment identified.Where the carrying amount of an asset is greater than its estimated recoverable amount, it is written downimmediately to its recoverable amount. The impairment loss is recognised in profit or loss for the year.An item of property and equipment is derecognised upon disposal or when no further economic benefits areexpected from its use or disposal. Gains and losses on derecognition of property and equipment are determinedby reference to their carrying amounts. On disposal of revalued assets, amounts in the revaluation reserve relatingto that asset are transferred to retained earnings.Investment propertiesInvestment properties comprise land and buildings and parts of buildings held to earn rentals and/or forcapital appreciation (including property under construction for such purposes). They are treated as long-terminvestments and carried at fair value, representing market value determined annually, based on valuations byexternal independent valuers. Investment properties are not subject to depreciation. Changes in their carryingamount between each end of the reporting period are processed, net of deferred tax, through profit or loss for theyear.Investment properties are derecognised either when they have been disposed of, or when the investment propertyis permanently withdrawn from use and no further economic benefit is expected from its disposal. On the retirementor disposal of an investment property, the difference between the net disposal proceeds and the carrying amountis charged or credited to profit or loss for the year.Properties under constructionProperties in the course of construction are carried at cost, less any recognised impairment loss. Cost includesprofessional fees and, for qualifying assets, borrowing costs capitalised in accordance with the group’s accountingpolicy. Such properties are classified to the appropriate categories of when completed and ready for intended use.2011 ANNUAL REPORT & FINANCIAL STATEMENTS PAGE 39