ANNUAL REPORT 2014
63
NOTES TO THE FINANCIAL STATEMENTS
(CONTINUED)
For the financial year ended 31 December 2014
2.
SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
(f)
Investment properties
Investment properties of the Group, principally comprising office and industrial buildings, are held for long-
term rental yields and/or capital appreciation and are not substantially occupied by the Group.
Investment properties are classified as non-current assets, initially recognised at cost and subsequently
carried at fair value, determined annually by independent professional valuers on the highest-and-best-use
basis. Changes in fair values are recognised in profit or loss.
Investment properties are subject to renovations or improvements at regular intervals. The cost of major
renovations and improvements is capitalised as additions and the carrying amounts of the replaced components
are written off to profit or loss. The cost of maintenance, repairs and minor improvements is charged to profit
or loss when incurred.
On disposal of an investment property, the difference between the net disposal proceeds and the carrying
amount is recognised in profit or loss.
(g)
Investments in subsidiaries and associated companies
Investments in subsidiaries and associated companies are stated at cost less accumulated impairment losses
(Note 2(h)(2)) in the Company’s statement of financial position. On disposal of investments in subsidiaries
and associated companies, the difference between net disposal proceeds and the carrying amount of the net
investments is recognised in profit or loss.
(h)
Impairment of non-financial assets
(1)
Goodwill
Goodwill, recognised separately as an intangible asset, is tested annually for impairment and whenever
there is any indication that the goodwill may be impaired.
For the purpose of impairment testing of goodwill, goodwill is allocated to each of the Group’s cash
generating units (“CGU”) expected to benefit from synergies of the business combination.
An impairment loss is recognised when the carrying amount of CGU, including the goodwill, exceeds
the recoverable amount of the CGU. Recoverable amount of the CGU is the higher of the 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 in profit or loss and is not reversed in a subsequent period.
(2)
Intangible assets, Property, plant and equipment and Investments in subsidiaries and associated
companies
Intangible assets, property, plant and equipment and investments in subsidiaries and associated
companies are reviewed for impairment whenever there is any objective evidence or indication that
these assets may be impaired.
