Annual Report 2014 | S P SETIA BERHAD GROUP | 125
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 October 2014
V. FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(k) Concession assets
Concession assets are recognised to the extent that the Group has acquired development rights or a right (a licence) to charge users
of public services.
Development rights are derecognised as and when the rights are exercised. Licences are amortised on a systematic basis over its
Concession assets are stated at cost less accumulated amortisation and impairment losses. The policy for the recognition and
measurement of impairment losses is in accordance with 1(q)(iii) below.
Amortisation of the concession assets begins when it is available for use, which means when it is in the location and condition
necessary for it to be capable of operating in the manner intended by management.
Gains or losses arising from derecognition of a concession asset are measured as the difference between the net disposal proceed
and the carrying amount of the asset and is recognised in profit or loss when the asset is derecognised.
A lease is an agreement whereby the lessor conveys to the lessee in return for a payment or series of payments for the right to use
an asset for an agreed period of time.
(i) Finance lease
A finance lease is a lease that transfers substantially all the risks and rewards incidental to ownership of an asset. Title may or
may not eventually be transferred.
Property, plant and equipment acquired by way of finance leases are stated at amounts equal to the lower of their fair values
and the present value of minimum lease payments at the inception of the leases, less accumulated depreciation and any
In calculating the present value of the minimum lease payments, the discount rate is the interest rate implicit in the lease, if
this is determinable; if not, the Group’s incremental borrowing rate is used.
(ii) Operating lease
An operating lease is a lease other than a finance lease.
Operating lease income or operating lease rentals are credited or charged to profit or loss on a straight-line basis over the period
of the lease.
(m) Development properties
Development properties are classified under two categories, i.e. land held for property development and property development
Land held for property development is defined as land on which development is not expected to be completed within the normal
operating cycle. Usually, no significant development work would have been undertaken on these lands other than infrastructure work,
earth work and landscape work incurred to put the land ready for development. Accordingly, land held for property development is
classified as non-current assets on the statement of financial position and is stated at cost plus incidental expenditure incurred to
put the land in a condition ready for development.