Page 92 - ar2013.pdf

NOTES TO THE FINANCIAL STATEMENTS
For the Ànancial year ended 31 December 2013
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COSCO Corporation (Singapore) Limited
F i nanc i a l Statement s
2. Significant accounting policies (continued)
2.4 Property, plant and equipment (continued)
(b) Depreciation
Freehold land is not depreciated. Depreciation on other items of property, plant and equipment is calculated
using the straight-line method to allocate their depreciable amounts over their estimated useful lives as
follows:
Useful lives
Buildings on freehold land 50 years
Leasehold land and buildings 10 - 50 years
Office renovations, furniture, fixtures and equipment 3 - 5 years
Plant, machinery and equipment 3 - 10 years
Motor vehicles 5 - 10 years
Motor vessels 20 years
Docks and quays 30 years
No depreciation is provided for construction-in-progress.
The residual values, estimated useful lives and depreciation method of property, plant and equipment
are reviewed, and adjusted as appropriate, at each balance sheet date. The effects of any revision are
recognised in the income statement when the changes arise.
(c) Subsequent expenditure
Subsequent expenditure relating to property, plant and equipment that has already been recognised is
added to the carrying amount of the asset only when it is probable that future economic benefits associated
with the item will flow to the Group and the cost of the item can be measured reliably. All other repair and
maintenance expenses are recognised in the income statement when incurred.
The motor vessels are subject to overhauls at regular intervals. The inherent components of the initial
overhaul are determined based on the estimated costs of the next overhaul and are separately depreciated
over a period of 2½ years in order to reflect the estimated intervals between two overhauls. The costs of
the overhauls subsequently incurred are capitalised as additions and the carrying amounts of the replaced
components are written off to the income statement.
(d) Disposal
On disposal of an item of property, plant and equipment, the difference between the disposal proceeds and
its carrying amount is recognised in the income statement.
2.5 Intangible assets
Goodwill on acquisitions
Goodwill on acquisitions of subsidiaries and businesses on or after 1 January 2010 represents the excess of (i) the
sum of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-
date fair value of any previous equity interest in the acquiree over (ii) the fair value of the net identifiable assets
acquired.
Goodwill on acquisition of subsidiaries and businesses prior to 1 January 2010 and on acquisition of joint ventures
and associated companies represents the excess of the cost of the acquisition over the fair value of the Group’s
share of the net identifiable assets acquired.