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Notes to the
Financial Statements
As at 31 March 2019
2.
Significant accounting policies (cont’d.)
2.3 Summary of significant accounting policies (cont’d.)
(i) Investment properties
Investment properties are properties which are held either to earn rental income or for capital
appreciation or for both. Such properties are measured initially at cost, including transaction
costs. Subsequent to initial recognition, investment properties are stated at cost less accumulated
depreciation and any accumulated impairment losses. Freehold land has an unlimited useful life and
therefore is not depreciated.
Depreciation of investment properties is provided for on a straight-line basis to write-off the cost of
the property to its residual value over its estimated useful life, at the following annual rates:
Freehold building
2%
Leasehold building
2% to 3%
Leasehold land
Over lease period
The residual values, useful life and depreciation method are reviewed at each financial year-
end to ensure that the amount, method and period of depreciation are consistent with previous
estimates and the expected pattern of consumption of the future economic benefits embodied in
the investment property.
Investment properties are derecognised when either they have been disposed off or when the
investment property is permanently withdrawn from use and no future economic benefit is expected
from its disposal. Any gains or losses on the retirement or disposal of an investment property are
recognised in the profit or loss in the year in which they arise.
(j) Inventories
Inventories are stated at the lower of cost and net realisable value.
Cost is determined on the First-In, First-Out (“FIFO”) basis. Cost of finished goods and work-in-
progress includes direct materials, direct labour, other direct costs and appropriate production
overheads.
Net realisable value represents the estimated selling price in the ordinary course of business less all
estimated costs to completion and the estimated costs necessary to make the sale.
(k) Income taxes
(i) Current tax
Current tax assets and liabilities are measured at the amount expected to be recovered from
or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are
those that are enacted or substantively enacted by the reporting date.
financial
statements
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