Old Chang Kee Ltd - Annual Report 2016 - page 76

A N N U A L R E P O R T 2 0 1 6 74
NOTES TO THE
FINANCIAL STATEMENTS
For the Financial Year Ended 31 March 2016
2. Summary of significant accounting policies (cont’d)
2.6 Property, plant and equipment
All items of property, plant and equipment are initially recorded at cost. Subsequent to recognition, property, plant and equipment other
than freehold land and buildings are measured at cost less accumulated depreciation and any accumulated impairment losses.
Freehold land and 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 freehold land and buildings at the end of the reporting period.
Any revaluation surplus is recognised in other comprehensive income and accumulated in equity under the asset revaluation reserve in
equity, 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. A revaluation deficit is recognised in profit or loss, except to the extent that it offsets an existing
surplus on the same asset carried in the asset revaluation reserve.
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 over the estimated useful lives of the assets as follows:
Buildings – Over the lower of the remaining lease terms or 50 years
Machinery and equipment – 5 years to 10 years
Motor vehicles – 5 years
Renovation – Over the lower of the remaining lease terms or 3 years to 5 years
Electrical fittings – Over the lower of the remaining lease terms or 5 years to 10 years
Furniture – 5 years to 10 years
Computers – 5 years
Assets under construction included in property, plant and equipment are not depreciated as these assets are not yet available for use.