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Annual Report 2013
KPJ HEALTHCARE BERHAD
182
2.
Summary of signi cant accounting policies (continued)
2.7
Property, plant and equipment
All items of property, plant and equipment are initially recorded at cost. The cost of an item of property, plant and equipment is
recognised as an asset if, and only if, it is probable that future economic bene ts associated with the item will ow to the Group
and the cost of the item can be measured reliably.
Subsequent to recognition, plant and equipment and furniture and xtures are measured at cost less accumulated depreciation and
accumulated impairment losses. When signi cant parts of property, plant and equipment are required to be replaced in intervals,
the Group recognises such parts as individual assets with speci c useful lives and depreciation, respectively. Likewise, when a
major inspection is performed, its cost is recognised in the carrying amount of the plant and equipment as a replacement if the
recognition criteria are satis ed. All other repair and maintenance costs are recognised in pro t or loss as incurred. Freehold land,
long leasehold land and buildings are measured at fair value less accumulated depreciation on long leasehold land and buildings
and impairment losses recognised after the date of the revaluation. Valuations are performed with suf cient regularity to ensure
that the carrying amount does not differ materially from the fair value of the freehold land, long leasehold land and buildings at the
reporting date.
Any revaluation surplus is recognised in other comprehensive income and accumulated in equity under the asset revaluation
reserve, except to the extent that it reverses a revaluation decrease of the same asset previously recognised in pro t or loss, in
which case the increase is recognised in pro t or loss. A revaluation de cit is recognised in pro t or loss, except to the extent that
it offsets an existing surplus on the same asset carried in the asset revaluation reserve.
Any accumulated depreciation as at the revaluation date is eliminated against the gross carrying amount of the asset and the net
amount is restated to the revalued amount of the asset. The revaluation surplus included in the asset revaluation reserve in respect
of an asset is transferred directly to retained earnings on retirement or disposal of the asset.
Freehold land has an unlimited useful life and therefore is not depreciated. Depreciation is computed on a straight-line basis over
the estimated useful lives of the assets as follows:
Buildings
2%
Renovation
10%
Medical and other equipment
7.5% - 25%
Furniture and ttings
10% - 20%
Motor vehicles
20%
Computers
20% - 33%
Capital work-in-progress included in plant and equipment are not depreciated as these assets are not yet available for use.
The carrying values of property, plant and equipment are reviewed for impairment when events or changes in circumstances
indicate that the carrying value may not be recoverable.
The residual value, useful life and depreciation method are reviewed at each nancial year-end, and adjusted prospectively, if
appropriate.
An item of property, plant and equipment is derecognised upon disposal or when no future economic bene ts are expected from its
use or disposal. Any gain or loss on derecognition of the asset is included in the pro t or loss in the year the asset is derecognised.
Notes to the
Financial Statements
For the financial year ended 31 December 2013
(continued)