NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 2023 NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 2023 3 MATERIAL ACCOUNTING POLICY INFORMATION (CONT’D) 3.2 Foreign currencies (cont’d) (ii) Foreign operations (cont’d) Foreign currency differences are recognised in OCI. However, if the foreign operation is a non wholly-owned subsidiary, then the relevant proportionate share of the translation difference is allocated to the NCI. When a foreign operation is disposed of such that control, significant influence or joint control is lost, the cumulative amount in the foreign currency translation reserve related to that foreign operation is reclassified to profit or loss as part of the gain or loss on disposal. When the Group disposes of only part of its interest in a subsidiary that includes a foreign operation while retaining control, the relevant proportion of the cumulative amount is reattributed to NCI. When the Group disposes of only part of its investment in an associate or joint venture that includes a foreign operation while retaining significant influence or joint control, the relevant proportion of the cumulative amount is reclassified to profit or loss. When the settlement of a monetary item receivable from or payable to a foreign operation is neither planned nor likely in the foreseeable future, foreign exchange gains and losses arising from such a monetary item that are considered to form part of the Group’s net investment in the foreign operation are recognised in OCI, and are presented in the foreign currency translation reserve in equity. 3.3 Property, plant and equipment (i) Recognition and measurement Items of property, plant and equipment are stated at cost, which includes capitalised borrowing costs, less accumulated depreciation and accumulated impairment losses. Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment. Borrowing costs paid and capitalised is presented as part of financing cash flows in the statement of cash flows. If significant parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment. Any gain or loss on disposal of an item of property, plant and equipment is recognised net in profit or loss. (ii) Subsequent costs The cost of replacing a component of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that future economic benefits embodied within the component will flow to the Group, and its cost can be measured reliably. The carrying amount of the replaced component is derecognised. The costs of the day-to-day servicing of property, plant and equipment are recognised in profit or loss as incurred. (iii) Depreciation Depreciation is based on the cost of an asset less its residual value. Significant components of individual assets are assessed and if a component has a useful life that is different from the remainder of that asset, that component is depreciated separately. Depreciation is recognised as an expense in profit or loss on a straight-line basis over the estimated useful lives of each component of an item of property, plant and equipment. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the Group will obtain ownership by the end of the lease term. 3 MATERIAL ACCOUNTING POLICY INFORMATION (CONT’D) 3.3 Property, plant and equipment (cont’d) (iii) Depreciation (cont’d) No depreciation is provided on freehold land (including 999-year leasehold land). For freehold and leasehold properties under development and renovation-in-progress, no depreciation is provided until these items have been completed. The estimated useful lives for the current and comparative years are as follows: Freehold buildings and leasehold land and buildings • Core component of hotel buildings – 50 years, or lease term if shorter • Surface, finishes and services of hotel buildings – 30 years, or lease term if shorter • Leasehold land – Lease term Furniture, fittings, plant and equipment and improvements – 3 to 20 years Residual values ascribed to the core component of hotel buildings depend on the nature, location and tenure of each hotel property. No residual values are ascribed to surface, finishes and services of hotel buildings and right-of-use assets in respect of leases where the Group is a lessee. Depreciation methods, useful lives and residual values are reviewed, and adjusted as appropriate, at each reporting date. 3.4 Investment properties (i) Recognition and measurement Investment properties are stated at cost less accumulated depreciation and accumulated impairment losses. Any gain and loss on disposal of investment properties (calculated as the difference between the net proceeds from disposal and the carrying amounts of the investment properties) are recognised in profit or loss. (ii) Depreciation Depreciation is recognised as an expense in profit or loss on a straight-line basis over the estimated useful lives of each component of an investment property. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the Group will obtain ownership by the end of the lease term. No depreciation is provided on freehold land (including 999-year leasehold land) included in the investment properties. The estimated useful lives for the current and comparative years are as follows: Freehold and leasehold properties – 50 years, or lease term if shorter Leasehold land – Lease term ranging from 50 to 96 years Furniture, fittings, plant and equipment and improvements – 3 to 20 years Depreciation methods and useful lives are reviewed, and adjusted as appropriate, at each reporting date. FINANCIALS FINANCIALS ANNUAL REPORT 2023 CITY DEVELOPMENTS LIMITED 141 140
RkJQdWJsaXNoZXIy ODIwNTc=