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/ MTQ CORPORATION LIMITED /
ANNUAL REPORT
2014/2015
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2015
(In Singapore dollars)
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D)
2.15 Property, plant and equipment (cont'd)
The carrying values of property, plant and equipment are reviewed for impairment when events or changes in
circumstances indicate that the carrying value may not be recoverable.
The residual value, useful life and depreciation method are reviewed at each financial year-end, and adjusted
prospectively, if appropriate.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are
expected from its use or disposal. Any gain or loss on de-recognition of the asset is included in profit or loss in the
year the asset is derecognised.
2.16 Subsidiaries
A subsidiary is an investee that is controlled by the Group. The Group controls an investee when it is exposed,
or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns
through its power over the investee.
In the Company's separate financial statements, investments in subsidiaries are accounted for at cost less any
impairment losses.
2.17 Joint arrangements
A joint arrangement is a contractual arrangement whereby two or more parties have joint control. Joint control is
the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant
activities require the unanimous consent of the parties sharing control.
A joint arrangement is classified either as joint operation or joint venture, based on the rights and obligations of
the parties to the arrangement.
To the extent the joint arrangement provides the Group with rights to the assets and obligations for the liabilities
relating to the arrangement, the arrangement is a joint operation. To the extent the joint arrangement provides the
Group with rights to the net assets of the arrangement, the arrangement is a joint venture.
2.18 Joint venture
The Group recognises its interest in the joint venture using the equity method from the date on which it becomes
a joint venture.
On acquisition of the investment, any excess of the cost of the investment over the Group’s share of the net fair
value of the investee’s identifiable assets and liabilities is accounted as goodwill. Any excess of the Group’s share
of the net fair value of the investee’s identifiable assets and liabilities over the cost of the investment is included
as income in the determination of the entity’s share of joint venture’s profit or loss in the period in which the
investment is acquired.
Under the equity method, the investment in joint venture is carried in the balance sheet at cost plus post-acquisition
changes in the Group’s share of net assets of the joint venture. The profit or loss reflects the share of results of
the operations of the joint venture. Distributions received from the joint venture reduce the carrying amount of the
investment. Where there has been a change recognised in other comprehensive income by the joint venture, the
Group recognises its share of such changes in other comprehensive income. Unrealised gains and losses resulting
from transactions between the Group and the joint venture are eliminated to the extent of the interest in the joint
venture.
