90
COSCO Corporation (Singapore) Limited
Annual Report 2015
NOTES TO THE
FINANCIAL STATEMENTS
For the financial year ended 31 December 2015
Financial Statements
2.
Significant accounting policies
(continued)
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.
(iv)
Components of costs
The cost of an item of property, plant and equipment initially recognised includes its
purchase price and any cost that is directly attributable to bringing the asset to the
location and condition necessary for it to be capable of operating in the manner intended
by management. Cost also includes borrowing costs that are directly attributable to the
acquisition, construction or production of a qualifying asset (Note 2.6). The projected cost
of dismantlement, removal or restoration is also recognised as part of the cost of property,
plant and equipment if the obligation for the dismantlement, removal or restoration is
incurred as a consequence of either acquiring the asset or using the asset for purpose
other than to produce inventories.
(b)
Depreciation
Depreciation 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
Leasehold land and buildings
10 - 50 years
Office renovations, furniture, fixtures and equipment
3 - 5 years
Plant, machinery and equipment
3 - 20 years
Motor vehicles
5 - 10 years
Motor vessels
20 years
Docks and quays
40 - 50 years
