FINANCIAL STATEMENTS - Mewah Group

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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
ANNUAL REPORT 2012NOTES TOTHE FINANCIAL STATEMENTSFor the financial year ended 31 December 20122. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)2.4 Property, plant and equipment (continued)(c) Subsequent expenditureSubsequent expenditure relating to property, plant and equipment that has already been recognised is added to the carryingamount of the asset only when it is probable that future economic benefits associated with the item will flow to the Groupand the cost of the item can be measured reliably. All other repair and maintenance expenses are recognised in profit or losswhen incurred.(d) DisposalOn disposal of an item of property, plant and equipment, the difference between the disposal proceeds and its carryingamount is recognised in profit or loss. Any amount in revaluation reserve relating to that asset is transferred to retained profitsdirectly.2.5 Intangible assetsGoodwill on acquisitionsGoodwill on acquisitions of subsidiaries and businesses on or after 1 January 2010 represents the excess of (i) the sum of theconsideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of anyprevious equity interest in the acquiree over (ii) the fair value of the identifiable net assets acquired.Goodwill on acquisitions of subsidiaries and businesses prior to 1 January 2010 and on acquisition of associated companiesrepresents the excess of the cost of the acquisition over the fair value of the Group’s share of the net identifiable assets acquired.Goodwill on subsidiaries is recognised separately as intangible assets and carried at cost less accumulated impairment losses.Goodwill on associated companies is included in the carrying amount of the investments.Gains and losses on the disposal of subsidiaries and associated companies include the carrying amount of goodwill relating to theentity sold, except for goodwill arising from acquisitions prior to 1 January 2001. Such goodwill was adjusted against retainedprofits in the year of acquisition and is not recognised in profit or loss on disposal.2.6 Investments in subsidiaries and associated companiesInvestments in subsidiaries and associated companies are carried at cost less accumulated impairment losses in the Company’sstatement of financial position. On disposal of such investments, the difference between disposal proceeds and the carryingamounts of the investments are recognised in profit or loss.55
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FINANCIAL STATEMENTS - Mewah Group

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