Annual Report 2015
FINANCIAL SECTION
117
3 PRINCIPAL ACCOUNTING POLICIES
(continued)
(e) Investment properties
Property that is held for long-term rental yields or for capital appreciation or both, and that is not occupied
by the Group, is classified as investment property. Investment property also includes property that is being
constructed or developed for future use as investment property.
Investment property comprises leasehold land and buildings. Land held under operating leases are classified
and accounted for as investment property when the rest of the definition of investment property is met. The
operating lease is accounted for as if it was a finance lease.
Investment property is measured initially at its cost, including related transaction costs and where applicable
borrowing costs. After initial recognition, investment property is carried at fair value. Fair value is determined
by professional valuation conducted at the end of each reporting period. Changes in fair value are recognised
in the consolidated income statement.
Subsequent expenditure is included in the carrying amount of the asset only when it is probable that future
economic benefits associated with the asset will flow to the Group and the cost of the asset can be measured
reliably. All other repairs and maintenance costs are expensed in the consolidated income statement during
the financial period in which they are incurred.
If an investment property becomes owner-occupied, it is reclassified as property, plant and equipment, and its
fair value at the date of reclassification becomes its cost for accounting purposes.
If a property becomes an investment property because its use has changed, any difference resulting between
the carrying amount and the fair value of this property at the date of transfer is recognised in equity as a
revaluation of property, plant and equipment. However, if the fair value of the property at the date of transfer
which results in a reversal of the previous impairment loss, the write-back is recognised in the consolidated
income statement.
(f) Property, plant and equipment
Property, plant and equipment are stated at historical cost less accumulated depreciation and impairment
losses. Historical cost includes expenditure that is directly attributable to the acquisition of assets. Subsequent
costs are included in the carrying amount of the assets or recognised as a separate asset, as appropriate, only
when it is probable that future economic benefits associated with the asset will flow to the Group and the
cost of the asset can be measured reliably. The carrying amount of the replaced part is derecognised. All other
repair and maintenance costs are charged in the consolidated income statement during the financial period
in which they are incurred. The carrying amount of an asset is written down immediately to its recoverable
amount if the carrying value of an asset is greater than its estimated recoverable amount.
(i) Assets under construction
All direct costs relating to the construction of property, plant and equipment, including borrowing costs
during the construction period are capitalised as the costs of the assets.
