2016 RASV Annual Report

7. PROPERTY, PLANT AND EQUIPMENT (cont.)
Assets are depreciated from the date of acquisition or, in respect of internally constructed assets, from the time an asset is completed
and ready for use. The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each reporting
date. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its
estimated recoverable amount.
The depreciation rates used for each class of asset is calculated on a straight line basis to write off the net cost of each item of property,
plant and equipment over their expected useful lives as follows:
Building and Structures 2.5% - 10%
Plant and Equipment 10% - 33.3%
Motor Vehicles 20%
An item of property, plant and equipment is derecognised upon disposal or when there is no future economic benefit to the company.
Gains and losses between the carrying amount and the disposal proceeds are included in the Statement of Profit or Loss and Other
Comprehensive Income.
Impairment of non-financial assets
For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash-generating unit
to which the asset belongs. If any such indication of impairment exists and where the carrying values exceed the estimated recoverable
amount, the assets or cash-generating units are written down to their recoverable amount.
The recoverable amount of non-current assets is the greater of fair value less costs to sell and value in use. In assessing value in use, the
estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments
of the time value of money and the risks specific to the asset.
Impairment losses are recognised in the Statement of Profit or Loss and Other Comprehensive Income.
Estimation of useful lives of assets
Management determines the estimated useful lives and related depreciation charges for property, plant and equipment and finite life
intangible assets. The useful lives could change significantly as a result of technical innovations or some other event. The depreciation
charge will increase where the useful lives are less than previously estimated lives, or technically obsolete or non-strategic assets that
have been abandoned or sold will be written off or written down.
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