SINGAPORE WINDSOR HOLDINGS LIMITED
| Annual Report 2015
42
Year ended 31 March 2015
NOTES TO THE
FINANCIAL STATEMENTS
2.
Summary of significant accounting policies (cont’d)
Property, plant and equipment
Depreciation is provided on a straight-line basis to allocate the gross carrying amounts of the assets less their
residual values over their estimated useful lives of each part of an item of these assets. The annual rates of
depreciation are as follows:
Leasehold buildings
–
Over the remaining terms of the lease that is 2%
Leasehold improvements
–
10% to 20%
Plant and equipment
–
18% to 20%
An asset is depreciated when it is available for use until it is derecognised even if during that period the item is
idle. Fully depreciated assets still in use are retained in the financial statements.
Property, plant and equipment are carried at cost on initial recognition and after initial recognition at cost less any
accumulated depreciation and any accumulated impairment losses. The gain or loss arising from the derecognition
of an item of property, plant and equipment is measured as the difference between the net disposal proceeds, if
any, and the carrying amount of the item and is recognised in profit or loss. The residual value and the useful life of
an asset is reviewed at least at each end of the reporting year and, if expectations differ significantly from previous
estimates, the changes are accounted for as a change in an accounting estimate, and the depreciation charge for
the current and future periods are adjusted.
Cost also includes acquisition cost, borrowing cost capitalised and any cost directly attributable to bringing the
asset or component to the location and condition necessary for it to be capable of operating in the manner
intended by management. Subsequent cost are recognised as an asset only when it is probable that future
economic benefits associated with the item will flow to the entity and the cost of the item can be measured reliably.
All other repairs and maintenance are charged to profit or loss when they are incurred.
Land use rights
Land use rights relate to the land in People’s Republic of China where the factories are located. Cost includes
acquisition cost and any direct attributable costs. Subsequent cost are recognised as an asset only when it is
probable that future economic benefits associated with the item will flow to the entity and the cost of the item can
be measured reliably.
Land use rights are stated at cost less accumulated amortisation and provision for impairment. The land use rights
are amortised over the term of the leases that range from 2.0% to 9.0%.
Investment property
Investment property is property owned or held under a finance lease 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
sale in the ordinary course of business. It includes an investment property in the course of construction. After
initial recognition at cost including transaction costs the cost model is used to measure the investment property
using the treatment for property, plant and equipment, that is, at cost less any accumulated depreciation and any
accumulated impairment losses. An investment property that meets the criteria to be classified as held for sale is
carried at the lower of carrying amount and fair value less costs to sell. For disclosure purposes, the fair values are
determined periodically on a systematic basis at least once yearly by management. The annual rate of depreciation
is 4.5%.
