NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 December 2014
Financial Statements
89
Annual Report 2014
2.
Significant accounting policies
(continued)
2.3
Group accounting (continued)
(c)
Associated companies
(continued)
(ii)
Equity method of accounting
(continued)
Unrealised gains on transactions between the Group and its associated companies are
eliminated to the extent of the Group’s interest in the associated companies. Unrealised
losses are also eliminated unless the transactions provide evidence of an impairment of the
assets transferred. The accounting policies of associated companies have been changed
where necessary to ensure consistency with the accounting policies adopted by the Group.
(iii)
Disposals
Investments in associated companies are derecognised when the Group loses significant
influence. If the retained equity interest in the former associated company is a financial asset,
the retained equity interest is measured at fair value. The difference between the carrying
amount of the retained interest at the date when significant influence is lost, and its fair value
and any proceeds on partial disposal, is recognised in profit or loss.
Please refer to Note 2.9 “Investments in subsidiaries and associated companies” for
the accounting policy on investments in associated companies in the separate financial
statements of the Company.
2.4
Property, plant and equipment
(a)
Measurement
(i)
Land and buildings
Land and buildings are initially recognised at cost. Buildings and leasehold land are
subsequently carried at cost less accumulated depreciation and accumulated impairment
losses.
(ii)
Motor vessels
Motor vessels are initially recognised at cost and subsequently carried at cost less
accumulated depreciation and accumulated impairment losses.
The cost of motor vessels includes actual interest incurred on borrowings used to finance
the motor vessels while under construction and other direct relevant expenditure incurred
in bringing the vessels into operation. For this purpose, the interest rate applied to funds
provided for constructing the motor vessels is arrived at by reference to the actual rate
payable on borrowings for construction purposes. The capitalisation of interest charges will
cease upon the completion and delivery of the motor vessels.
(iii)
Other property, plant and equipment
All other items of property, plant and equipment are initially recognised at cost and
subsequently carried at cost less accumulated depreciation and accumulated impairment
losses.
