inter roller fa final

Notes to the Financial StatementsProperty, plant and equipment and depreciation (Cont’d)Leasehold propertiesMotor vehiclesPlant and machineryComputer systemsOthersRemaining life of the lease7 years3 - 10 years3 years3 - 10 yearsNo depreciation is provided for(i) freehold land(ii) leasehold properties under construction; and(iii) plant and machinery under constructionThe net surplus or deficit on revaluation of leasehold properties is taken to revaluation reserve. In the event thatthe total revaluation surplus is not sufficient to cover a deficit, the amount by which the deficit exceeds theamount in the revaluation reserve is charged to the income statement. An increase in revaluation directly relatedto a previous decrease in carrying amount that was charged to the income statement is credited to the incomestatement to the extent that it offsets the previously recorded decrease of that same property, plant and equipment.On disposal of property, plant and equipment, the revaluation surplus relating to the property, plant and equipmentis taken directly to the retained profits.No deferred taxation is provided on the revaluation surplus as they are considered to be capital in nature andthe revalued properties are used in the business and not to be sold.For acquisitions and disposals during the financial year, depreciation is provided from the month of acquisitionand to the month before disposal respectively.Fully depreciated property, plant and equipment are retained in the accounts until they are no longer in use.The carrying amount of property, plant and equipment including those revalued are reviewed yearly in order toassess whether the carrying amount needs to be written down to its recoverable amount. To assist the directorsin determining recoverable amounts, an independent professional valuation of the leasehold properties is madeonce in every five years. Recoverable amount is defined as the higher of value in use and net selling price.Subsequent expenditure relating to a property, plant and equipment that has already been recognized is addedto the carrying amount of the property, plant and equipment when it is probable that future economic benefits,in excess of the originally assessed standard of performance of the existing property, plant and equipment, willflow to the enterprise. All other subsequent expenditure is recognised as an expense in the period in which it isincurred.InvestmentsQuoted and unquoted investments held on a long-term basis are stated at cost. Provision is made for diminutionin value, other than temporary, on an individual investment basis.Investments held as current assets are stated at the lower of cost and net realisable or market value determinedon an individual investment basis. Cost is determined on the weighted average method.46 inter-roller engineering limited annual report2004