Year ended 31 March 2016
NOTES TO THE
FINANCIAL STATEMENTS
SINGAPORE MYANMAR INVESTCO LIMITED
| Annual Report 2016
51
3.
Significant accounting policies and other explanatory information (cont’d)
3A. Significant accounting policies (cont’d)
Property, plant and equipment (cont’d)
Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of self-
constructed assets includes:
the cost of materials and direct labour;
any other costs directly attributable to bringing the assets to a working condition for their intended
use;
when the Group has an obligation to remove the asset or restore the site, an estimate of the costs of
dismantling and removing the items and restoring the site on which they are located; and
capitalised borrowing 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. All other
repairs and maintenance are charged to profit or loss when they are incurred.
An asset is depreciated when it is installed and available for use, or in respect of internally constructed
assets, from the date that the asset is completed and ready 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.
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%
Intangible assets
On initial recognition, intangible assets acquired separately are measured at cost. The cost of a separately
acquired intangible asset comprises its purchase price, including import duties and non-refundable purchase
taxes, after deducting trade discounts and rebates and any directly attributable cost of preparing the asset
for its intended use. After initial recognition, intangible assets are carried at cost less any accumulated
amortisation and impairment losses. The estimated useful life and amortisation method are revised
at the end of each reporting period with the effect of any changes in estimate being accounted for on a
prospective basis. An intangible asset is derecognised on disposal, or when no future economic benefits are
expected from use or disposal. Gains or losses arising from derecognition of an intangible asset – measured
as the difference between the net disposal proceeds and the carrying amount of the asset – are recognised
in profit or loss when the asset is derecognised. For intangible assets with finite useful lives, amortisation is
calculated so as to write off the cost of the assets less its estimated residual value, over its useful economic
life as follows:
MIC License
–
6.7%
Land use rights
Land use rights related to the land in People’s Republic of China where the factories are located. Cost
included acquisition cost and any direct attributable costs. Subsequent costs were recognised as an asset
only when it was probable that future economic benefits associated with the item would flow to the entity
and the cost of the item measured reliably.
Land use rights were stated at cost less accumulated amortisation and provision for impairment. The land
use rights were amortised over the term of the leases that range from 2.0% to 9.0%.
Land use agreements and leases in Myanmar have been signed during the course of the tower construction
and recognised in profit or loss.
