2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.7 Investments in associates (continued)
After application of the equity method, the Group determines whether it is necessary to recognise an impairment loss
on its investment in its associate. At each reporting date, the Group determines whether there is objective evidence
that the investment in the associate is impaired. If there is such evidence, the Group calculates the amount of
impairment as the difference between the recoverable amount of the associate and its carrying value, then recognises
the loss as ‘Share of profit of an associate’ in the statement of profit or loss.
2.8 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 benefits associated with the
item will flow to the Group and the cost of the item can be measured reliably.
Subsequent to recognition, plant and equipment and furniture and fixtures are measured at cost less accumulated
depreciation and accumulated impairment losses. When significant parts of property, plant and equipment are required
to be replaced in intervals, the Group recognises such parts as individual assets with specific 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 satisfied. All other repair and maintenance
costs are recognised in profit 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 sufficient 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 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.
241
KPJ Healthcare Berhad
Annual Report
2015
NOTES TO THE
FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2015 (CONTINUED)
