Page 108 - S P Setia Annual Report 2013
P. 108

106 | Financial Statements S P SETIA BERHAD GROUP Annual Report 2013





NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 OCTOBER 2013 (CONT’D)






1. SiGniFicant accOUntinG POlicieS (cOnt’D)

(g) associated companies (cont’d)
Equity accounting is discontinued when the carrying amount of the investment in an associated company diminishes by virtue of losses
to zero, unless the Group has incurred legal or constructive obligations or made payments on behalf of the associated company.

The results and reserves of associated companies are accounted for in the consolidated fnancial statements based on audited and/
or unaudited management fnancial statements made up to the end of the fnancial year and prepared using accounting policies that
conform to those used by the Group for like transactions in similar circumstances.

(h) Interest in joint ventures

A joint venture is a contractual arrangement whereby two or more parties undertake an economic activity that is subject to joint control.
A jointly controlled entity is a joint venture that involves the establishment of a separate entity in which each venturer has an interest.
A jointly controlled operation is a joint venture that involves the use of the assets and other resources of the venture rather than the
establishment of a corporation, partnership or other entity, or a fnancial structure that is separate from the venturers themselves.
Investments in jointly controlled entities and jointly controlled operation are accounted for in the consolidated fnancial statements
using the proportionate consolidation method of accounting. The Group combines its share of each of the assets, liabilities, income
and expenses of the jointly controlled entities and jointly controlled operation with the similar items, line by line, in its consolidated
fnancial statements. The audited fnancial statements or the unaudited management accounts of the joint ventures are made up to
the end of the fnancial year and prepared using accounting policies that conform to those used by the Group for like transactions in
similar circumstances.
In the Company’s separate fnancial statements, investments in jointly controlled entities and jointly controlled operation are stated at
cost less impairment losses. Impairment losses are recognised in proft or loss.
On disposal, the difference between the net disposal proceeds and the carrying amount of the jointly controlled entity disposed is
included in proft or loss.
(i) Property, plant and equipment

(i) Measurement basis

Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses, if any.

The cost of property, plant and equipment includes expenditure that is directly attributable to the acquisition of an asset.

Subsequent costs are included in the asset’s carrying amount when it is probable that future economic benefts associated with
the asset will fow to the Group and the Company and the cost of the asset can be measured reliably. The carrying amount of the
replaced part is derecognised. All other repairs and maintenance are charged to proft or loss during the fnancial year in which
they are incurred.
Property, plant and equipment are derecognised upon disposal or when no future economic benefts are expected from their use
or disposal. On disposal, the difference between the net disposal proceeds and the carrying amount is recognised in proft or loss.
(ii) Depreciation

Freehold land and capital work-in-progress are not depreciated.

Depreciation is calculated to write off the depreciable amount of other property, plant and equipment on a straight-line basis over
their estimated useful lives. The depreciable amount is determined after deducting residual value from cost.
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