perspective perspective - ChartNexus

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)
(g) Property, plant and equipment (cont’d)
Depreciation on assets under construction commences when the assets are ready for their intended use.
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Where an indication of impairment exists at the balance sheet date, an analysis is performed to assess whether the carrying
amount of the asset is fully recoverable. A write-down is made if the carrying amount exceeds the recoverable amount.
See accounting policy Note 2(i) on impairment of assets.
On disposal of an asset, the difference between the net disposal proceeds and its carrying amount is charged or credited to
the income statement. In the case of revalued land, the amount in non-distributable revaluation reserve relating to these
revalued land which had been disposed is transferred to distributable reserves.
Interest costs on borrowings to finance the construction of property, plant and equipment are capitalised as part of the cost
of the asset during the period of time that is required to complete and prepare the asset for its intended use.
(h) Investments
(i) Subsidiary companies
Investments in subsidiary companies are stated at valuation based on the net tangible assets value of the subsidiary
companies, less accumulated impairment losses. Acquisitions subsequent to valuation date are stated at cost until the
next revaluation. A valuation is conducted at least once in every five years.
An increase in carrying amount arising from revaluation of investments in subsidiary companies is credited directly
to shareholders’ equity as non-distributable revaluation reserves. To the extent that a decrease in carrying amount
offsets a previous increase, for the same investment, that has been credited to non-distributable revaluation reserves
and not subsequently reversed or utilised, it is charged against that non-distributable revaluation reserves. In all other
cases, a decrease in carrying amount is charged to the income statement. An increase on revaluation which is directly
related to a previous decrease in carrying amount for the same investment that was charged to the income statement
is credited to the income statement to the extent that it offsets the previously recorded decrease.
On disposal of a subsidiary company, the difference between the net disposal proceeds and the Group’s share of the
subsidiary company’s net assets is charged or credited to the income statement. The amount in non-distributable
revaluation reserves relating to these subsidiary companies will be transferred to distributable reserves. Goodwill on
acquisition which has been credited or charged to capital reserve arising on consolidation and retained earnings
respectively will be deducted when determining the gain or loss on disposal of a subsidiary company.
Where an indication of impairment exists, the carrying amount of the investments in subsidiary companies is assessed
and written down immediately to its recoverable amount. See accounting policy Note 2(i) on impairment of assets.
(ii) Associated companies and other non-current investments
Investments in associated companies are shown at cost less accumulated impairment losses. Where an indication of
impairment exists, the carrying amount of the investment is assessed and written down immediately to its
recoverable amount.
Investments in other non-current investments are shown at cost and an allowance for diminution in value is made
where, in the opinion of the Directors, there is a decline other than temporary in the value of such investments. Where
there has been a decline other than temporary in the value of an investment, such a decline is recognised as an
expense in the period in which the decline is identified.
On disposal of an investment, the difference between the net disposal proceeds and its carrying amount is charged or
credited to the income statement.
UNITED MALAYAN LAND BHD