Quality - UAC Berhad

Notes to The Financial StatementsFor The Financial Year Ended 31 December 20053 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)aBasis of consolidation (continued)The gain or loss on disposal of a subsidiary company is the difference between net disposal proceeds and theGroup's share of its net assets and together with any exchange differences and goodwill on acquisition notpreviously charged to the income statement.bProperty, plant and equipmentAll property, plant and equipment were initially stated at cost. Certain land and buildings were subsequentlyshown at market value, based on valuations of external independent valuers, less subsequent accumulateddepreciation and impairment losses. All other property, plant and equipment are stated at historical cost lessaccumulated depreciation and impairment losses.The directors have applied the transitional provision of International Accounting Standard No. 16 (Revised)Property, Plant and Equipment as adopted by Malaysian Accounting Standards Board where certain land andbuildings are stated at their 1984 valuation less accumulated depreciation and impairment losses. Accordingly,these valuations have not been updated.Freehold land is not amortised as it is deemed to have an indefinite life. The revalued amount of leasehold landis amortised in equal instalments over the periods of the respective leases that range from 81 to 91 years.All other property, plant and equipment are depreciated on a straight line basis to write off the cost of eachasset, to their residual values over their estimated useful lives at the following annual rates:Buildings 2 - 4Plant, machinery and motor vehicles 5 - 25Furniture, fittings and equipment 10 - 50%Assets under construction are carried as capital work in progress and depreciation commences when the assetsare ready for their intended use.At each balance sheet date, the Group assesses whether there is any indication of impairment. If suchindication exists, an analysis is performed to assess whether the carrying amount of the asset is fullyrecoverable. A write down is made if the carrying amount exceeds the recoverable amount.Gains and losses on disposal of property, plant and equipment are determined by reference to their carryingamount and are recognised as income or expense in the income statement. On disposal of revalued assets,amounts in revaluation reserve relating to those assets are transferred to retained earnings.cNon current investmentsInvestments in subsidiaries are shown at cost. Where an indication of impairment exists, the carrying amountof the investment is assessed and written down immediately to its recoverable amount.UAC BERHAD (5149-H) (Incorporated in Malaysia) 55