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BAKER TECHNOLOGY LIMITED ANNUAL REPORT 2012
BAKER TECHNOLOGY LIMITED ANNUAL REPORT 2012
2. Summaryof significant accounting policies (cont’d)
2.7 Joint venture (cont’d)
The financial statements of the joint venture are prepared as of the same reporting date as theCompany unless
it is impracticable todo so. When the financial statements of a joint venture used inapplying the equitymethod
are prepared as of a different reporting date from that of theCompany, adjustments aremade for the effects of
significant transactions or events that occur between the sale and the reporting date of the Company. Where
necessary, adjustments aremade to bring the accounting policies into linewith those of theGroup.
Upon loss of joint control, theGroupmeasures any retained investment at its fair value. Any difference between
the carrying amount of the former joint venture entity upon loss of joint venture control and the aggregate of the
fair value of the retained investment and proceeds from disposal is recognised in profit or loss.
2.8 Property, plant and equipment
All items of property, plant and equipment are initially recorded at cost. Subsequent to recognition, plant and
equipment and furniture and fixtures aremeasured at cost less accumulated depreciation and any accumulated
impairment losses. The cost includes the cost of replacing part of the property, plant and equipment and
borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying
property, plant and equipment. The cost of an item of property, plant and equipment is recognised as an asset
if, and only if, it is probable that future economic benefits associated with 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 amajor inspection is performed, its cost is recognised in the carrying amount of the plant and equipment
as a replacement if the recognition criteria are satisfied. All other repair andmaintenance costs are recognised
in profit or loss as incurred.
Leasehold land and buildings are measured at fair value less accumulated depreciation on buildings and
impairment losses recognisedafter thedateof the revaluation. Valuations areperformedwith sufficient regularity
to ensure that the carrying amount does not differ materially from the fair value of the leasehold land and
buildings at the end of the reporting period.
Any revaluation surplus is recognised inother comprehensive incomeandaccumulated in equity under theasset
revaluation reserve, except to the extent that it reverses a revaluation decrease of the same asset previously
recognised in profit or loss, in which case the increase is recognised in profit or loss. A revaluation deficit is
recognised inprofit or loss, except to the extent that it offsets an existing surplus on the same asset carried in the
asset revaluation reserve.
Any accumulated depreciation as at the revaluation date is eliminated against the gross carrying amount of
the asset and the net amount is restated to the revalued amount of the asset. The revaluation surplus included in
the asset revaluation reserve in respect of an asset is transferred directly to retained earnings on retirement or
disposal of the asset.
for the financial year ended 31december 2012
for the financial year ended 31december 2012
2. Summaryof significant accounting policies (cont’d)
2.8 Property, plant and equipment (cont’d)
Depreciation of an asset begins when 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 to 5 years
Plant and equipment
-
3 to 10 years
Assets under construction are not depreciated as these assets are not yet available for use.
Fully depreciatedassets still in use are retained in the financial statements until they are no longer in use and no
further charge for depreciation is made 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 depreciation method 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.
2.9 Goodwill
Goodwill is initially measured at cost. Following initial recognition, goodwill is measured at cost less any
accumulated impairment losses.
For thepurposeof impairment testing, goodwill acquired inabusiness combination is, from theacquisitiondate,
allocated to each of the Group’s cash-generating units that are expected to benefit from the synergies of the
combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units.
The cash-generating unit towhich goodwill has been allocated is tested for impairment annually andwhenever
there is an indication that the cash-generating unit may be impaired. Impairment is determined for goodwill by
assessing the recoverable amount of each cash-generating unit (or group of cash-generating units) towhich the
goodwill relates.Where the recoverableamount of the cash-generating unit is less than the carryingamount, an
impairment loss is recognised in the profit or loss. Impairment losses recognised for goodwill are not reversed in
subsequent periods.
notestothe
financialstatements
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financialstatements
