APM AUTOMOTIVE HOLDINGS BERHAD
56
NOTES TO THE
FINANCIAL STATEMENTS
2.
Significant accounting policies (continued)
(d) Property, plant and equipment (continued)
(i)
Recognition and measurement (continued)
The Group has changed its accounting policy with respect to the measurement of land and buildings
from the cost model to the revaluation model. The Group applied the change in accounting policy
prospectively. The Group’s properties were revalued in the financial year ended 31 December 2014
by independent professional qualified valuers. Valuations will be performed with sufficient regularity to
ensure that the carrying amount does not differ materially from the fair value of the land and buildings
at the reporting date. The Group revalues a property comprising land and building every 3 years or at
more frequent interval when there is a significant change in its fair value. The effects from the change
are disclosed in Note 37.
Cost includes expenditures that are directly attributable to the acquisition of the asset and any other
costs directly attributable to bringing the asset to working condition for its intended use, and the
costs of dismantling and removing the items and restoring the site on which they are located. The
cost of self-constructed assets also includes the cost of materials and direct labour.
Purchased software that is integral to the functionality of the related equipment is capitalised as part
of that equipment.
When 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.
The gain or loss on disposal of an item of property, plant and equipment is determined by comparing
the proceeds from disposal with the carrying amount of property, plant and equipment and is
recognised net within “other income” and “other expenses” respectively in profit or loss.
Surpluses arising from revaluation are dealt with in the revaluation reserve account. Any deficit arising
is offset against the revaluation reserve to the extent of a previous increase for the same property. In
all other cases, a decrease in carrying amount is recognised in profit or loss. When revalued assets
are sold, the amounts included in the revaluation surplus reserve are transferred to retained earnings.
(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 the future economic benefits embodied within
the component will flow to the Group or the Company, and its cost can be measured reliably. The
carrying amount of the replaced component is derecognised to profit or loss. 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 calculated over the depreciable amount, which is the cost of an asset, or other
amount substituted for cost, less its residual value.
Depreciation is recognised 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 from the date that they are available for
use. 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. Freehold land
is not depreciated. Property, plant and equipment under construction are not depreciated until the
assets are ready for their intended use.
