Abacus Property Group – Annual Financial Report 2018

NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2018
ABACUS PROPERTY GROUP
22. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(l)
Interest in joint arrangements
The Group’s interest in joint venture entities is accounted for under the equity method of accounting in the
consolidated financial statements. The investment in the joint venture entities is carried in the consolidated
balance sheet at cost plus post-acquisition changes in the Group’s share of net assets of the joint ventures, less
any impairment in value. The consolidated income statement reflects the Group’s share of the results of
operations of the joint ventures.
Investments in joint ventures are held at the lower of cost or recoverable amount in the investing entities.
The Group’s interest in joint operations that give the parties a right to the underlying assets and obligations
themselves is accounted for by recognising the Group’s share of those assets and obligations.
(m) Property, plant and equipment
Hotel property, plant and equipment
Property (including land and buildings), plant and equipment represent owner-occupied properties and are initially
measured at cost including transaction costs and acquisition costs. Subsequent to initial recognition, properties
are measured at fair value less accumulated depreciation and any impairment in value after the date of
revaluation.
Depreciation is calculated on a straight-line basis over the estimated useful life of the asset as follows:
Buildings – 50 years
Revaluations of land and buildings
Plant and equipment – 3 to 20 years
Any revaluation increment is credited to the asset revaluation reserve included in the equity section of the balance
sheet except to the extent that it reverses a revaluation decrease of the same asset previously recognised in
profit or loss, in which case the increase is recognised in profit or loss.
Any revaluation decrease is recognised in profit or loss except to the extent that it offsets a previous revaluation
increase for the same asset in which case the decrease is debited directly to the asset revaluation reserve to the
extent of the credit balance existing in the revaluation reserve for that asset.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These are
included in the income statement.
Any accumulated depreciation as at the revaluation date is eliminated against the gross carrying amounts of the
assets and the net amounts are restated to the revalued amounts of the assets.
Hotel property, plant and equipment are independently valued on an annual basis unless the underlying financing
requires a more frequent independent valuation cycle.
Other property, plant and equipment
Land and buildings are measured at fair value, based on periodic valuations by external independent valuers, less
accumulated depreciation on buildings and less any impairment losses recognised after the date of the
revaluation.
Plant and equipment is stated at historical cost less accumulated depreciation and any impairment losses.
Depreciation is calculated on a straight-line basis over the estimated useful life of the asset as follows:
Buildings – 40 years
Plant and equipment – over 5 to 15 years
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