74
STAMFORD LAND CORPORATION LTD
NOTES TO THE FINANCIAL STATEMENTS
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
Borrowing Costs
Borrowing costs are recognised in profit or loss using the effective interest method except for those costs that
are directly attributable to the construction or development of properties and assets under construction. This
includes those costs on borrowings acquired specifically for the construction or development of properties and
assets under construction, as well as those in relation to general borrowings used to finance the construction
or development of properties and assets under construction.
The actual borrowing costs incurred during the period up to the issuance of the temporary occupation permit
less any investment income on temporary investment of these borrowings, are capitalised in the cost of the
property under development.
Property, Plant and Equipment
Property, plant and equipment is stated at cost less any accumulated depreciation and any accumulated
impairment loss.
The gain or loss arising from the derecognition of an item of property, plant and equipment is determined as the
difference between the net disposal proceeds, if any, and the carrying amount of the item and is recognised in
profit or loss.
Depreciation is based on the cost of an asset less its residual value. Significant components of individual
assets are assessed and if a component has a useful life that is different from the remainder of that asset,
that component is depreciated separately.
Depreciation is recognised as an expense 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 as follows:
Freehold buildings
– 100 years
Leasehold land and buildings
– terms of the leases ranging from 51 to 70 years
Renovations, furniture and fittings – 2 to 25 years
Motor vehicles
– 5 to 7 years
Equipment and computers
– 2 to 15 years
Depreciation is recognised from the date that the property, plant and equipment are installed and are ready
for use. No depreciation is provided on freehold land and capital work-in-progress.
Depreciation methods, useful lives and residual values are reviewed at the end of each reporting period and
adjusted if appropriate.
