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2. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
2.4 Summary of significant accounting policies (cont’d)
(b) Property and equipment
All items of property and equipment are initially recorded at cost. The cost of an item of property and equipment is
recognised as an asset if, and only if, it is probable that future economic benefits associated with the item will flow
to the Group and the cost of the item can be measured reliably.
Subsequent to recognition, property and equipment are measured at cost less accumulated depreciation and
accumulated impairment losses. When significant parts of property and equipment are required to be placed
in intervals, the Group recognises such parts as individuals assets with specific useful lives and depreciation,
respectively. Likewise, when a major inspection is performed, its cost is recognised in the carrying amount of the
property and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance
costs are recognised in statements of income as incurred.
Freehold land has an unlimited useful life and therefore is not depreciated. Depreciation of other property and
equipment is provided for on a straight-line basis over the estimated useful lives of the assets as follows:
Building
50 years
Renovation and improvement
10 years
Furniture, electrical fittings and equipment
10 years
Motor vehicles
5 years
Office equipment
5 years
Computers
3 years
Assets under construction/work-in-progress included in property and equipment are not depreciated as these assets
are not yet available for use.
The carrying values of property and equipment are reviewed for impairment when events or changes in circumstances
indicate that the carrying value may not be recoverable. The policy for the recognition and measurement of
impairment is in accordance with Note 2.4(e).
The residual value, useful life and depreciation method are reviewed at each financial year-end, and adjusted
prospectively, if appropriate.
An item of property and equipment is derecognised upon disposal or when no future economic benefits are expected
from its use or disposal. Any gain or loss on derecognition of the asset is included in the statements of income in the
year the asset is derecognised.
EXIM Bank Annual Report 2013
111