Notes to the Financial Statements For the financial year ended 31 December 2024 2 MATERIAL ACCOUNTING POLICIES (continued) 2.4 Property, plant and equipment Property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses. Cost includes expenditure that is directly attributable to the acquisition of the asset. Certain of the Group’s property, plant and equipment acquired through interests in subsidiaries, are accounted for as acquisition of assets (note 2.2(a)). Subsequent expenditure relating to property, plant and equipment that has already been recognised is added to the carrying amount of the asset if it is probable that future economic benefits, in excess of the originally assessed standard of performance of the existing asset, will flow to the Group and its cost can be measured reliably. All other subsequent expenditure is recognised as an expense in the period in which it is incurred. Depreciation is recognised from the date that the property, plant and equipment are installed and are ready for use. Freehold land has unlimited useful life and therefore is not depreciated. Depreciation on property, plant and equipment is recognised in the 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: Leasehold buildings 1 to 30 years Plant, machinery and improvements 1 to 10 years Motor vehicles 5 years Furniture, fittings and equipment 1 to 10 years The assets’ residual values, useful lives and depreciation methods are reviewed at each reporting date, and adjusted if appropriate. 2.5 Intangible assets (a) Goodwill For business combinations, the Group measures goodwill as at the acquisition date based on the fair value of the consideration transferred (including the fair value of any pre-existing equity interest in the acquiree) and the recognised amount of any non-controlling interests in the acquiree, less the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed. When the amount is negative, a gain on bargain purchase is recognised in profit or loss. Goodwill is subsequently measured at cost less accumulated impairment losses. Goodwill arising from the acquisition of subsidiaries is included in intangible assets. Goodwill arising from the acquisition of associates and joint ventures is presented together with interests in associates and joint ventures. Goodwill is tested annually for impairment as described in note 2.9. (b) Other intangible assets Other intangible assets with finite useful lives are measured at cost less accumulated amortisation and accumulated impairment losses. These are amortised in profit or loss on a straight-line basis over their estimated useful lives of one to eighteen years, from the date on which the assets are available for use. Other intangible assets with indefinite useful lives are not amortised and are measured at cost less accumulated impairment losses. 104 CapitaLand Investment Limited Notes to the Financial Statements For the financial year ended 31 December 2024 2 MATERIAL ACCOUNTING POLICIES (continued) 2.6 Investment properties and investment properties under development Investment properties are properties held either to earn rental or for capital appreciation or both. Investment properties under development are properties being constructed or developed for future use as investment properties. Certain of the Group’s investment properties acquired through interests in subsidiaries, are accounted for as acquisition of assets (note 2.2(a)). Investment properties and investment properties under development are initially recognised at cost, including transaction costs, and subsequently at fair value with any change therein recognised in profit or loss. Cost includes expenditure that is directly attributable to the acquisition of the investment property. The cost of self-constructed investment property includes the cost of materials and direct labour, any other costs directly attributable to bringing the investment property to a working condition for their intended use and capitalised borrowing costs. The fair value is determined based on internal valuation or independent professional valuation. Independent valuation is also carried out on occurrence of acquisition. When an investment property or investment property under development is disposed of, the resulting gain or loss recognised in profit or loss is the difference between the net disposal proceeds and the carrying amount of the property. Transfers to, or from, investment properties are made where there is a change in intent and use of the investment properties. 2.7 Financial instruments (a) Non-derivative financial assets Classification and measurement The Group classifies its financial assets in the following measurement categories: • amortised cost; • fair value through other comprehensive income (FVOCI); and • fair value through profit or loss (FVTPL). The classification depends on the Group’s business model for managing the financial assets as well as the contractual terms of the cash flows of the financial assets. Financial assets with embedded derivatives are considered in their entirety when determining whether their cash flows are solely payment of principal and interest. The Group reclassifies financial assets when and only when its business model for managing those assets changes. At initial recognition A financial asset is recognised if the Group becomes a party to the contractual provisions of the financial asset. At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value through profit or loss are expensed in profit or loss. 105 Annual Report 2024
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