4. MATERIAL ACCOUNTING POLICIES (continued) 4.5 Intangible assets and goodwill (continued) (iii) Amortisation Amortisation is calculated based on the cost of the asset, less its residual value. Amortisation is recognised in profit or loss on a straight-line basis over the estimated useful lives of intangible assets, other than goodwill, from the date that they are available for use. The estimated useful lives for the current year and comparative years are as follows: • Asset management agreements 10 years • Property management agreements 10 years Amortisation methods and useful lives are reviewed at the end of each reporting period and adjusted if appropriate. 4.6 Investment properties Investment properties (including investment properties under development) are properties held either to earn rental income or for capital appreciation or for both, but not for sale in the ordinary course of business, use in the production or supply of goods or services or for administrative purposes. Investment properties are measured at cost on initial recognition and subsequently at fair value with any change therein recognised in profit or loss. Cost includes expenditure that is directly attributable to the acquisition of the investment property. The cost of self-constructed investment property includes the cost of materials and direct labour, any other costs directly attributable to bringing the investment property to a working condition for their intended use and capitalised borrowing costs. Any gain or loss on disposal of an investment property (calculated as the difference between the net proceeds from disposal and the carrying amount of the item) is recognised in profit or loss. Property that is being constructed for future use as investment property is accounted for at fair value. Transfer to, or from, investment properties are made where there is a change in use. Examples of evidence of a change in use include: • commencement of development with a view to sell, for a transfer from investment properties to development properties; • commencement of leasing activities, for a transfer from development properties to investment properties; • commencement of owner-occupation, for a transfer from investment properties to property, plant and equipment; and • end of owner-occupation, for a transfer from property, plant and equipment to investment properties. When the use of a property changes such that it is reclassified as property, plant and equipment, its fair value at the date of reclassification becomes its cost for subsequent accounting. 4.7 Development properties Development properties are measured at the lower of cost and net realisable value. Cost includes acquisition costs, development expenditure, capitalised borrowing costs (applicable to performance obligations satisfied at a point in time) and other costs directly attributable to the development activities. Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale. The write-down to net realisable value is presented as allowance for foreseeable losses. Notes to the Financial Statements Year ended 31 December 2024 OVERVIEW PERFORMANCE SUSTAINABILITY FINANCIALS APPENDIX 179 ANNUAL REPORT 2024
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