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PERENNIAL REAL ESTATE HOLDINGS LIMITED
Annual Report 2015
NOTES TO THE FINANCIAL STATEMENTS
3 SIGNIFICANT ACCOUNTING POLICIES
(continued)
3.4 Plant and equipment
(continued)
(i)
Recognition and measurement (continued)
When parts of an item of plant and equipment have different useful lives, they are accounted for as separate items
(major components) of plant and equipment.
The gain or loss on disposal of an item of plant and equipment (calculated as the difference between the net
proceeds from disposal and the carrying amount of the item) is recognised in profit or loss.
(ii)
Subsequent costs
The cost of replacing a component of an item of plant and equipment is recognised in the carrying amount of the
item if it is probable that the future economic benefits embodied within the component will flow to the Group, and its
cost can be measured reliably. The carrying amount of the replaced component is derecognised. The costs of the
day-to-day servicing of plant and equipment are recognised in profit or loss as incurred.
(iii)
Depreciation
Depreciation is based on the cost of an asset less its residual value. Significant components of individual assets are
assessed and if a component has a useful life that is different from the remainder of that asset, that component is
depreciated separately.
Depreciation is recognised as an expense in profit or loss on a straight-line basis over the estimated useful lives of
each component of an item of plant and equipment, unless it is included in the carrying amount of another asset.
Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain
that the Group will obtain ownership by the end of the lease term.
Depreciation is recognised from the date that the plant and equipment are installed and are ready for use, or in
respect of internally constructed assets, from the date that the asset is completed and ready for use.
The estimated useful lives used for the current period and comparative years are as follows:
• Furniture, fittings and office equipment
3 – 5 years
• Renovation
3 years or lease term whichever is shorter
• Computer equipment and software
1 – 3 years
Depreciation methods, useful lives and residual values are reviewed at the end of each reporting period and adjusted
if appropriate.
