60
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2015
(In Singapore dollars)
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
2.14 Investment properties (cont’d)
Investment properties are derecognised when either they have been disposed of or when the investment property
is permanently withdrawn from use and no future economic benefit is expected from its disposal. Any gain or loss
on the retirement or disposal of an investment property is recognised in profit or loss in the year of retirement or
disposal.
Transfers are made to or from investment property only when there is a change in use. For a transfer from investment
property to owner-occupied property, there is no change in the cost of the property for measurement or disclosure
purposes. For a transfer from owner occupied property to investment property, the property is accounted for in
accordance with the accounting policy for property, plant and equipment set out in Note 2.15 up to the date of
change in use.
2.15 Property, plant and equipment
All items of property, plant and equipment are initially recorded at cost. The cost includes the cost of replacing
part of the property, plant and equipment and borrowing costs that are directly attributable to the acquisition,
construction or production of a qualifying property, plant and equipment. The accounting policy for borrowing
costs is set out in Note 2.11. The cost of an item of property, plant and equipment is recognised as an asset if, and
only if, it is probable that future economic benefits associated with the item will flow to the Group and the cost of
the item can be measured reliably.
Subsequent to recognition, property, plant and equipment are measured at cost less accumulated depreciation
and any accumulated impairment losses. When significant parts of property, plant and equipment are required
to be replaced in intervals, the Group recognises such parts as individual assets with specific useful lives and
depreciation, respectively. Likewise, when a major inspection is performed, its cost is recognised in the carrying
amount of the property, plant and equipment as a replacement if the recognition criteria are satisfied. All other
repair and maintenance costs are recognised in profit or loss as incurred. Leasehold buildings are measured at
fair value less accumulated depreciation on buildings and impairment losses recognised after the date of the
revaluation. Valuations are performed with sufficient regularity to ensure that the carrying amount does not differ
materially from the fair value of the leasehold buildings at the end of the reporting period.
Any accumulated depreciation as at the revaluation date is eliminated against the gross carrying amount of the
asset and the net amount is restated to the revalued amount of the asset. The revaluation surplus included in the
asset revaluation reserve in respect of an asset is transferred directly to retained earnings on retirement or disposal
of the asset.
Freehold land has an unlimited useful life and therefore is not depreciated. Depreciation is computed on a straight-
line basis or a diminishing value basis over the estimated useful lives of the assets as follows:
Leasehold buildings
– the remaining term of the leases at the time of acquisition
Plant, workshop and rental equipment
– 2 to 20 years
Furniture and fixtures
– 2 to 20 years
Motor vehicles
– 3 to 10 years
Office equipment
– 1 to 5 years
Remotely operated vehicles (ROV) and vessels – 10 to 20 years
Assets under construction included in plant and equipment are not depreciated as these assets are not yet
available for use.
