Notes to the Financial Statements - SingTel

Notes to the Financial StatementsFor the financial year ended 31 March 20112.18 Property, Plant and EquipmentProperty, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses, whereapplicable. The cost of self-constructed assets includes the cost of material, direct labour, capitalised borrowing costs and anappropriate proportion of production overheads.Depreciation is calculated on a straight-line basis to write off the cost of the property, plant and equipment over their expecteduseful lives. Property, plant and equipment under finance leases are depreciated over the shorter of the lease term or usefullife. The estimated useful lives are as follows -No. of yearsBuildings 5 - 40Transmission plant and equipment 5 - 25Switching equipment 3 - 10Other plant and equipment 3 - 20Other property, plant and equipment consist mainly of motor vehicles, office equipment, and furniture and fittings.No depreciation is provided on freehold land, long-term leasehold land with a remaining lease period of more than 100 yearsand capital work-in-progress. Leasehold land with a remaining lease period of 100 years or less is depreciated in equalinstallments over its remaining lease period.In respect of capital work-in-progress, assets are depreciated from the month the asset is completed and held ready for use.Costs to acquire computer software which are an integral part of the related hardware are capitalised and recognised as assetsand included in property, plant and equipment when it is probable that the costs will generate economic benefits beyond oneyear and the costs are associated with identifiable software products which can be reliably measured by the Group.The cost of property, plant and equipment includes expenditure that is directly attributable to the acquisition of the items.Dismantlement, removal or restoration costs are included as part of the cost if the obligation for dismantlement, removal orrestoration is incurred as a consequence of acquiring or using the asset. Costs may also include transfers from equity of anygains or losses on qualifying cash flow hedges of foreign currency purchases of property, plant and equipment. Subsequentexpenditure is included in the carrying amount of an asset when it is probable that future economic benefits, in excess of theoriginally assessed standard of performance of the existing asset, will flow to the Group.The residual values and useful lives of property, plant and equipment are reviewed, and adjusted as appropriate, at the end ofeach reporting period.On disposal of property, plant and equipment, the difference between the disposal proceeds and its carrying value is taken tothe income statement.112 SINGAPORE TELECOMMUNICATIONS LIMITED AND SUBSIDIARY COMPANIES