NOTES
TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2016
(In Singapore dollars)
61
MTQ CORPORATION LIMITED
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
2.14 Investment properties
Investment properties are properties that are either owned by the Group or leased under a finance lease that
are held to earn rentals or for capital appreciation, or both, rather than for use in the production or supply of
goods or services, or for administrative purposes, or in the ordinary course of business. Investment properties
comprise completed investment properties and properties that are being constructed or developed for future use
as investment properties. Properties held under operating leases are classified as investment properties when the
definition of an investment property is met.
Investment properties are initially measured at cost, including transaction costs. The carrying amount includes the
cost of replacing part of an existing investment property at the time that cost is incurred if the recognition criteria
are met.
Subsequent to initial recognition, investment properties are measured at cost less accumulated depreciation and
accumulated impairment losses.
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is permanently withdrawn from use and no future economic benefit is expected from its disposal.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.
