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NOTES TO THE FINANCIAL STATEMENTS
For the Ànancial year ended 31 December 2013
92
COSCO Corporation (Singapore) Limited
F i nanc i a l Statement s
2. Significant accounting policies (continued)
2.8 Investment properties
Investment properties include those portions of office buildings that are held for long-term rental yields and/or for
capital appreciation.
Investment properties are initially recognised at cost and subsequently carried at cost less accumulated depreciation
and accumulated impairment losses. Depreciation is calculated using the straight-line method to allocate
the depreciable amounts over the estimated useful lives of 10 to 50 years. The residual values, useful lives and
depreciation method of investment properties are reviewed, and adjusted as appropriate, at each balance sheet
date. The effects of any revision are included in the income statement when the changes arise.
Investment properties are subject to renovations or improvements at regular intervals. The cost of major renovations
and improvements is capitalised and the carrying amounts of the replaced components are recognised in the
income statement. The cost of maintenance, repairs and minor improvements is recognised in the income statement
when incurred.
On disposal of an investment property, the difference between the disposal proceeds and the carrying amount is
recognised in the income statement.
2.9 Investments in subsidiaries and associated companies
Investments in subsidiaries and associated companies are carried at cost less accumulated impairment losses in
the Company’s balance sheet. On disposal of investments in subsidiaries and associated companies, the difference
between disposal proceeds and the carrying amounts of the investments are recognised in the income statement.
2.10 Impairment of non-financial assets
(a) Goodwill
Goodwill recognised separately as an intangible asset is tested for impairment annually, and whenever there
is indication that the goodwill may be impaired. Goodwill included in the carrying amount of an investment in
associated company is tested for impairment as part of the investment, rather than separately.
For the purpose of impairment testing of goodwill, goodwill is allocated to each of the Group’s cash-
generating unit (“CGU”) expected to benefit from synergies arising from the business combination.
An impairment loss is recognised when the carrying amount of a CGU, including the goodwill, exceeds the
recoverable amount of the CGU. The recoverable amount of a CGU is the higher of a CGU’s fair value less
cost to sell and value-in-use.
The total impairment loss of a CGU is allocated first to reduce the carrying amount of goodwill allocated to
the CGU and then to the other assets of the CGU pro-rata on the basis of the carrying amount of each asset
in the CGU.
An impairment loss on goodwill is recognised as an expense and is not reversed in a subsequent period.