FINANCIAL STATEMENTS - Mewah Group

MEWAH INTERNATIONAL INC.NOTES TOTHE FINANCIAL STATEMENTSFor the financial year ended 31 December 20122. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)2.4 Property, plant and equipment(a) Measurement(i)Property, plant and equipmentAll property, plant and equipment are initially recognised at cost and subsequently carried at cost less accumulateddepreciation and accumulated impairment losses.When an asset is revalued, any accumulated depreciation at the date of revaluation is eliminated against the grosscarrying amount of the asset. The net amount is then restated to the revalued amount of the asset.Increases in carrying amounts arising from revaluation, including currency translation differences, are recognised in theasset 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. Decreases in carrying amounts that offset previous increases of the same asset arerecognised against the asset revaluation reserve. All other decreases in carrying amounts are recognised in the statementof comprehensive income.On 1 January 2007, the Group has elected to adopt FRS 101 exemption to deem the previous revaluation of certainproperty, plant and equipment as deemed cost (Note 18(c)).(ii) Components of costsThe cost of an item of property, plant and equipment initially recognised includes its purchase price and any cost that isdirectly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in themanner intended by management. Cost also includes borrowing costs that are directly attributable to the acquisition,construction or production of a qualifying asset (refer to Note 2.8 on borrowing costs).(b) DepreciationDepreciation is calculated using the straight-line method to allocate their depreciable amounts over their estimated usefullives. The annual rates of depreciation are as follows:Leasehold land and buildingsAmortised over the period of leases (30 to 99 years)Freehold buildings 2%Plant and equipment 5%Furniture, fixtures and office equipment 5% to 20%Motor vehicles 20%Freehold land and capital expenditure in progress are stated at cost and not depreciated.The residual values, estimated useful lives and depreciation method of property, plant and equipment are reviewed, andadjusted as appropriate, at each statement of financial position date. The effects of any revision are recognised in profit orloss when the changes arise.54