Annual Report 2012 - e-KONG Group Limited

2. PRINCIPAL ACCOUNTING POLICIES (continued)Goodwill (continued)In respect of a subsidiary, any excess of the acquisition-date amounts of identifiable assets acquired and theliabilities assumed of the acquired subsidiary over the sum of the consideration transferred, the amount of anynon-controlling interests in the acquiree and the fair value of the acquirer’s previously held interest in the acquiree,if any, after reassessment, is recognised immediately in the income statement as a bargain purchase. In respectof an associate or a jointly-controlled entity, any excess of the Group’s share of its net fair value of identifiableassets and liabilities over the cost of an acquisition is recognised as income immediately.Discontinued operationA discontinued operation is a component of the Group that comprises operations and cash flows that can beclearly distinguished, operationally and for financial reporting purposes, from the rest of the Group. It representsa separate major line of business or geographical area of operations, or is part of a single co-ordinated planto dispose of a separate major line of business or geographical area of operations, or is a subsidiary acquiredexclusively with a view to resale. Classification as a discontinued operation occurs upon disposal or whenthe operation meets the criteria to be classified as held for sale, if earlier. It also occurs when an operation isabandoned.Property, plant and equipmentProperty, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses.The cost of an item of property, plant and equipment comprises its purchase price and any directly attributablecosts of bringing the asset to its working condition and location for its intended use. Repairs and maintenanceare charged to the income statement during the year in which they are incurred.Depreciation is provided to write off the cost, net of accumulated impairment losses, of property, plant andequipment over their estimated useful lives from the date on which they are available for use and after takinginto account their estimated residual values, using the straight-line method, at the following rates per annum:Leasehold improvementsOver the remaining lease termsMachinery and equipment 20% – 33%Office equipment, furniture and fittings 20% – 33%Motor vehicles 20% – 33%Assets held under finance leases are depreciated over the shorter of their expected useful lives or the terms ofthe leases.An item of property, plant and equipment is derecognised upon disposal or when no future economic benefitsare expected to arise from the continued use of the asset. Any gain or loss arising on derecognition of the asset(calculated as the difference between the net disposal proceeds and the carrying amount of the item) is includedin the income statement in the year in which the item is derecognised.Annual Report 2012 41