Notes to the Financial Statements - Cahaya Mata Sarawak Bhd
Notes to the Financial Statements - Cahaya Mata Sarawak Bhd
Notes to the Financial Statements - Cahaya Mata Sarawak Bhd
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<strong>Notes</strong> <strong>to</strong> <strong>the</strong> <strong>Financial</strong> <strong>Statements</strong><br />
For <strong>the</strong> fi nancial year ended 31 December 2011<br />
2. Summary of signifi cant accounting policies (contd.)<br />
2.7 Property, plant and equipment (contd.)<br />
Any revaluation surplus is recognised in o<strong>the</strong>r comprehensive income and accumulated in equity under<br />
<strong>the</strong> asset revaluation reserve, except <strong>to</strong> <strong>the</strong> extent that it reverses a revaluation decrease of <strong>the</strong> same<br />
asset previously recognised in profi t or loss, in which case <strong>the</strong> increase is recognised in profi t or loss. A<br />
revaluation defi cit is recognised in profi t or loss, except <strong>to</strong> <strong>the</strong> extent that it offsets an existing surplus on<br />
<strong>the</strong> same asset carried in <strong>the</strong> asset revaluation reserve.<br />
Any accumulated depreciation as at <strong>the</strong> revaluation date is eliminated against <strong>the</strong> gross carrying amount<br />
of <strong>the</strong> asset and <strong>the</strong> net amount is restated <strong>to</strong> <strong>the</strong> revalued amount of <strong>the</strong> asset. The revaluation surplus<br />
included in <strong>the</strong> asset revaluation reserve in respect of an asset is transferred directly <strong>to</strong> retained earnings<br />
on retirement or disposal of <strong>the</strong> asset.<br />
Freehold land have unlimited useful lives and <strong>the</strong>refore are not amortised. Leasehold land are amortised<br />
over <strong>the</strong>ir lease terms. Depreciation is computed on a straight-line basis over <strong>the</strong> estimated useful lives of<br />
<strong>the</strong> assets as follows:<br />
Buildings, jetty, roads and drainage 50 years or over <strong>the</strong> period of lease whichever is shorter<br />
Plant and machinery 4 years <strong>to</strong> 50 years<br />
Offi ce equipment and mo<strong>to</strong>r vehicles 3 years <strong>to</strong> 20 years<br />
Assets under construction included in property, plant and equipment are not depreciated as <strong>the</strong>se assets<br />
are not yet available for use.<br />
The carrying values of property, plant and equipment are reviewed for impairment when events or changes<br />
in circumstances indicate that <strong>the</strong> carrying value may not be recoverable.<br />
The residual value, useful life and depreciation method are reviewed at each fi nancial year-end, and<br />
adjusted prospectively, if appropriate.<br />
An item of property, plant and equipment is derecognised upon disposal or when no future economic<br />
benefi ts are expected from its use or disposal. Any gain or loss on derecognition of <strong>the</strong> asset is included<br />
in <strong>the</strong> profi t or loss in <strong>the</strong> year <strong>the</strong> asset is derecognised.<br />
2.8 Prepaid land lease payments<br />
Prepaid land lease payments are initially measured at cost. Following initial recognition, prepaid land lease<br />
payments are measured at cost less accumulated amortisation and accumulated impairment losses. The<br />
prepaid land lease payments are amortised over <strong>the</strong>ir lease terms.<br />
2.9 Land held for property development and property development costs<br />
(a) Land held for property development<br />
Land held for property development consists of land where no development activities have been<br />
carried out or where development activities are not expected <strong>to</strong> be completed within <strong>the</strong> normal<br />
operating cycle. Such land is classifi ed within non-current assets and is stated at cost less any<br />
accumulated impairment losses.<br />
Land held for property development is reclassifi ed as property development costs at <strong>the</strong> point when<br />
development activities have commenced and where it can be demonstrated that <strong>the</strong> development<br />
activities can be completed within <strong>the</strong> normal operating cycle.<br />
Annual Report 2011 87