BAKERTECHNOLOGYLIMITED
ANNUALREPORT2013
88
Notes to the
Financial Statements
for the financial year ended 31December 2013
2.
Summaryof significantaccounting policies (cont’d)
2.7
Property, plant and equipment
All items of property, plant and equipment are initially recorded at cost. Subsequent to recognition, property, plant and
equipment aremeasured at cost less accumulateddepreciation and any accumulated impairment losses. The cost includes the
cost of replacingpart of theproperty, plant andequipment andborrowing costs that aredirectlyattributable to theacquisition,
constructionor productionof aqualifyingproperty, plant andequipment. The cost of an itemof property, plant andequipment
is recognised as an asset if, and only if, it is probable that future economic benefits associatedwith the itemwill flow to the
Group and the cost of the item can bemeasured reliably.
When significant parts of property, plant and equipment are required to be replaced in intervals, the Group recognises
such parts as individual assets with specific useful lives and depreciation, respectively. Likewise, when a major inspection is
performed, its cost is recognised in the carryingamount of theplant andequipment as a replacement if the recognition criteria
are satisfied. All other repair andmaintenance costs are recognised inprofit or loss as incurred.
Depreciation of an asset beginswhen it is available for use and is computed on a straight-line basis over the estimated useful
life of the asset as follows :
Leasehold land and buildings - over remaining terms of lease
Leasehold improvements
- 5 to 7 years
Furniture and fittings
- 5 years
Office equipment
- 3 to 5 years
Motor vehicles
- 4 to5 years
Plant and equipment
- 3 to 10 years
Assets under construction are not depreciated as these assets are not yet available for use.
Fullydepreciatedassets still inuseare retained in thefinancial statements until they areno longer inuseandno further charge
for depreciation ismade in respect of these assets.
The carrying value of property, plant and equipment are reviewed for impairment when events or changes in circumstances
indicate that the carrying valuemay not be recoverable.
The residual value, useful life and depreciationmethod are reviewed at each financial year-end and adjusted prospectively, if
appropriate.
An item of property, plant and equipment is derecognised upon disposal or when no future economics benefits are expected
from its use or disposal. Any gain or loss arising on derecognition of the asset is included in the profit or loss in the year the
asset is derecognised.
2.8
Goodwill
Goodwill is initially measured at cost. Following initial recognition, goodwill is measured at cost less any accumulated
impairment losses.
For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisitiondate, allocated to
theGroup’s cash-generatingunits that are expected tobenefit from the synergies of the combination, irrespective ofwhether
other assets or liabilities of the acquiree are assigned to those units.
