I
annual report 2014
Notes to the Financial Statements
31 December 2014 (Cont’d)
66
4.
SIGNIFICANT ACCOUNTING POLICIES (cont’d)
4.3 Property, plant and equipment and depreciation (Cont’d)
At the end of each reporting period, the carrying amount of an item of property, plant and equipment is
assessed for impairment when events or changes in circumstances indicate that its carrying amount may not
be recoverable. A write down is made if the carrying amount exceeds the recoverable amount (see Note 4.6
to the financial statements on impairment of non-financial assets).
The residual values, useful lives and depreciation method are reviewed at the end of each reporting period to
ensure that the amount, method and period of depreciation are consistent with previous estimates and the
expected pattern of consumption of the future economic benefits embodied in the items of property, plant
and equipment. If expectations differ from previous estimates, the changes are accounted for as a change in
an accounting estimate.
The carrying amount of an item of property, plant and equipment is derecognised on disposal or when no future
economic benefits are expected from its use or disposal. The difference between the net disposal proceeds,
if any, and the carrying amount is included in profit or loss.
4.4 Leases
(a)
Operating leases
A lease is classified as an operating lease if it does not transfer substantially all the risks and rewards
incidental to ownership.
Lease payments under operating leases are recognised as an expense on a straight-line basis over the
lease term.
(b)
Leases of land
Land use rights represent up-front payment to acquire long-term interests in the usage of land and are
stated at cost less accumulated amortisation and impairment losses, if any. Amortisation is calculated
to write off the cost of the land use rights, using the straight-line method, over the period of the lease
term. For clarity purpose, the Group has presented the related leased assets under a separate line item
- “Land use rights” in the statements of financial position.
4.5 Investments in subsidiaries
A subsidiary is an entity in which the Group and the Company are exposed, or have rights, to variable returns
from its involvement with the subsidiary and have the ability to affect those returns through its power over the
subsidiary.
An investment in subsidiary, which is eliminated on consolidation, is stated in the separate financial statements
of the Company at cost. Put options written over non-controlling interests on the acquisition of subsidiary shall
be included as part of the cost of investment in the separate financial statements of the Company. Subsequent
changes in the fair value of the written put options over non-controlling interests shall be recognised in profit
or loss. Investments accounted for at cost shall be accounted for in accordance with MFRS 5
Non-current
Assets Held for Sale and Discontinued Operations
when they are classified as held for sale (or included in a
disposal group that is classified as held for sale) in accordance with MFRS 5.
When control of a subsidiary is lost as a result of a transaction, event or other circumstance, the Group would
derecognise all assets, liabilities and non-controlling interests at their carrying amount and to recognise the
fair value of the consideration received. Any retained interest in the former subsidiary is recognised at its fair
value at the date control is lost. The resulting difference is recognised as a gain or loss in profit or loss.
