2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.7 Property, plant and equipment (continued)
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 profit or loss, in which case the increase is recognised in profit or loss. A revaluation deficit is recognised in profit 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% – 20%
Medical and other equipment
7.5% – 33.33%
Furniture and fittings
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 financial year-end, and adjusted prospectively,
if appropriate.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are
expected from its use or disposal. Any gain or loss on derecognition of the asset is included in the profit or loss in the
year the asset is derecognised.
2.8 Investment properties
Investment properties are initially measured at cost, including transaction costs. Subsequent to initial recognition,
investment properties are measured at fair value which reflects market conditions at the reporting date. Fair value is
arrived at by reference to market evidence of transaction prices for similar properties and is performed by registered
independent valuers having an appropriate recognised professional qualification and recent experience in the location and
category of the properties being valued. Gains or losses arising from changes in the fair values of investment properties
are included in profit or loss in the year in which they arise.
A property interest under an operating lease is classified and accounted for as an investment property on a property-by-
property basis when the Group holds it to earn rentals or for capital appreciation or both. Any such property interest
under an operating lease classified as an investment property is carried at fair value.
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Notes to the
Financial Statements
For the financial year ended 31 December 2014 (continued)
KPJ Healthcare Berhad annual report
2014
