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SEE HUP SENG LIMITED
Annual Report 2012
47
Notes to the Financial Statements
31 DECEMBER 2012
2 Significant Accounting Policies (Continued)
(d) Property, Plant and Equipment
(i) Measurement
All property, plant and equipment are stated at cost or valuation less accumulated depreciation
and accumulated impairment losses.
The cost of an item of property, plant and equipment initially recognised includes its purchase
price and any cost that is directly attributable to bringing the asset to the location and condition
necessary for it to be capable of operating in the manner intended by management. The projected
cost of dismantlement, removal or restoration is also included as part of the cost of property
and equipment if the obligation for the dismantlement, removal or restoration is incurred as a
consequence of acquiring or using the asset.
(ii) Depreciation
Depreciation of property, plant and equipment is calculated using a straight-line method to allocate
the depreciable amounts over their estimated useful lives as follows:
Leasehold buildings – over the lease term
Renovation/leasehold improvements – 3 – 10 years
Furniture & fittings – 3 – 10 years
Machinery & yard equipment – 5 – 10 years
Motor vehicles – 5 – 10 years
Office and computer equipment – 2 – 10 years
The residual values, estimated useful lives and depreciation method of property, plant and
equipment are reviewed, and adjusted as appropriate, at each balance sheet date. The effects of
any revision are recognised in profit or loss when the changes arise.
Leasehold properties are revalued at regular intervals by the directors based upon the advice of
professional valuers to open market values on an existing use basis. When an asset is revalued,
any accumulated depreciation at the date of revaluation is eliminated against the gross carrying
amounts of the asset. The net amount is then restated to the revalued amount of the asset.
Increases in carrying amounts arising from revaluation, are recognised in the asset revaluation
reserve, unless they offset previous decreases in the carrying amounts of the same asset, in which
case, they are recognised in profit or loss. Decrease in carrying amounts that offset a previous
increase of the same asset is recognised against the asset revaluation reserve. All other decreases
in carrying amounts are recognised in profit or loss.
(iii) Subsequent expenditure
Subsequent expenditure relating to property, plant and equipment that has already been
recognised is added to the carrying amount of the asset only when 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. All other repairs and maintenance expense is recognised in the profit or
loss when incurred.