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STAMFORD LAND CORPORATION LTD
NOTES TO THE FINANCIAL STATEMENTS
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
Properties under Development
Properties under development are properties being developed for sale or future use as investment properties.
Development properties for sale are recognised at cost including cost of acquisition, cost of land, other direct
and related development expenditure, and borrowing costs incurred in developing the properties. Borrowing
costs payable on loans funding a property under development are capitalised, on a specific identification
basis, as part of the cost of the property under development until the completion of development. Completed
properties are transferred and accounted for as completed properties for sale.
Properties under development for future use as investment properties are initially recognised at cost and
subsequently at fair value with any change therein recognised in the profit or loss. Completed properties are
transferred and accounted for as investment properties.
Impairment of Non-Financial Assets
Property, plant and equipment
Investments in subsidiaries
Property, plant and equipment and investments in subsidiaries are tested for impairment whenever there is any
objective evidence or indication that these assets may be impaired.
For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to
sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash
inflows that are largely independent of those from other assets. If this is the case, the recoverable amount is
determined for the cash-generating unit (“CGU”) to which the asset belongs.
If the recoverable amount of the asset (or CGU) is estimated to be less than its carrying amount, the carrying
amount of the asset (or CGU) is reduced to its recoverable amount.
The difference between the carrying amount and recoverable amount is recognised as an impairment loss in
profit or loss, unless the asset is carried at revalued amount, in which case, such impairment loss is treated as
a revaluation decrease.
An impairment loss for an asset other than goodwill is reversed only if, there has been a change in the
estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised.
The carrying amount of this asset is increased to its revised recoverable amount, provided that this amount
does not exceed the carrying amount that would have been determined (net of any accumulated amortization
or depreciation) had no impairment loss been recognised for the asset in prior years.
