NOTES TO THE FINANCIAL STATEMENTS
For the Financial Year Ended 31 December 2014
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
2.9 JOINT VENTURES AND ASSOCIATES (CONT’D)
After application of the equity method, the Group determines whether it is necessary to recognise an additional impairment
loss on the Group’s investment in associates or joint ventures. The Group determines at the end of each reporting period
whether there is any objective evidence that the investment in the associate or joint venture is impaired. If this is the case,
the Group calculates the amount of impairment as the difference between the recoverable amount of the associate or
joint venture and its carrying value and recognises the amount in profit or loss.
Net assets of the associates and joint ventures are included in the consolidated financial statements under the equity
method based on their latest audited financial statements. Where their financial periods do not end on 31 December,
management accounts to 31 December are used. Where necessary, adjustments are made to bring the accounting
policies in line with those of the Group.
2.10 PROPERTY, PLANT AND EQUIPMENT
All items of property, plant and equipment are initially recorded at cost. Such cost includes the cost of replacing part of
the property, plant and equipment and borrowing costs that are directly attributable to the acquisition, construction or
production of a qualifying property, plant and equipment. The accounting policy for borrowing costs is set out in note
2.23. 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, property, plant and equipment other than land and buildings are measured at cost less
accumulated depreciation and any 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.
Land and buildings are measured at fair value less accumulated depreciation 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 land and buildings at the end of the reporting period.
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.
An item of property, plant and equipment is de-recognised upon disposal or when no future economic benefits are
expected from its use or disposal. Any gain or loss on de-recognition of the asset is included in the profit or loss in the
year the asset is de-recognised.
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THE STRAITS TRADING COMPANY LIMITED ANNUAL REPORT 2014
