OVERVIEW PERFORMANCE SUSTAINABILITY FINANCIALS APPENDIX 4 MATERIAL ACCOUNTING POLICIES (continued) 4.4 Property, plant and equipment (i) Recognition and measurement Items of property, plant and equipment are measured at cost, which includes capitalised borrowing costs, less accumulated depreciation and accumulated impairment losses. Interest paid and capitalised is presented as part of financing cash flows in the statement of cash flow. If significant parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment. Any gain or loss on disposal of an item of property, plant and equipment is recognised in profit or loss. (ii) Subsequent costs The cost of replacing a component of an item of property, 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 property, 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 property, plant and equipment, unless it is included in the carrying amount of another asset. Depreciation is recognised from the date that the property, 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 for the current and comparative years are as follows: • Leasehold land and buildings Lease period ranging from 47 to 91 years • Renovation 3 years or lease term whichever is shorter • Computer equipment and software 1 – 3 years • Plant and machinery 5 – 15 years • Furniture, fittings and equipment 3 – 10 years • Motor vehicles 10 years Depreciation methods, useful lives and residual values are reviewed at the end of each reporting period and adjusted if appropriate. (iv) Reclassification to investment property When the use of a property changes from owner-occupied to investment property, the property is remeasured to fair value and reclassified accordingly. Any gain arising on remeasurement is recognised in profit or loss to the extent that it reverses a previous impairment loss on the specific property, with any remaining gain recognised in OCI and presented in the revaluation reserve in equity. Any loss is recognised immediately in profit or loss. When the property is sold, the related amount in the revaluation reserve is transferred to retained earnings. Notes to the Financial Statements Year ended 31 December 2023 167 ANNUAL REPORT 2023
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