Page 84 - Neal and Massy Holdings Annual Report 2012

82 2012
NOTES TO THE Consolidated FINANCIAL STATEMENTS
September 30, 2012
Expressed in Thousands of Trinidad and Tobago dollars
2 Summary Of Significant Accounting Policies (continued)
2.5 Property, plant and equipment (continued)
Interest costs on borrowings to finance the construction of property, plant and equipment are capitalised during the period of
time that is required to complete and prepare the asset for its intended use. Other borrowing costs are expensed.
Land is not depreciated.
Depreciation is provided on the straight-line basis at rates estimated to write-off the cost of each asset over its expected
useful life. In the case of motor vehicles, depreciation is based on cost less an estimated residual value. The estimated useful
lives of assets are reviewed periodically, taking account of commercial and technological obsolescence as well as normal wear
and tear and depreciation rates are adjusted if appropriate.
Current rates of depreciation are:
Freehold property - 2%
Leasehold property and improvements - 2% to 20%
Plant and equipment - 5% to 33.3%
Rental assets - 25%
Furniture and fixtures - 10% to 25%
Motor vehicles - 10% to 25%
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each statement of financial position
date.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater
than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are included in the
consolidated income statement.
2.6 Investment property
Investment property, principally comprising freehold office buildings, is held for long-term rental yields and is not occupied by
the Group.
Investment properties are stated at amortised cost. Transaction costs are included on initial measurement. The fair values
of investment properties are disclosed in note 7. These are assessed using internationally accepted valuation methods, such
as taking comparable properties as a guide to current market prices or by applying the discounted cash flow method. Like
property, plant and equipment, investment properties are depreciated using the straight-line method.
The current rate of depreciation is 2%.
Investment and development properties are owned or leased by the Group and held for long-term rental income and capital
appreciation and exclude properties occupied by the Group.