NOTES TO THE FINANCIAL STATEMENTS
For the Financial Year Ended 31 December 2014
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
2.11 DEPRECIATION AND RESIDUAL VALUES
In the tin mining subsidiary, plant and equipment used in mining are depreciated using the unit-of-production method
based on economically recoverable ore reserves and resources over the estimated useful lives of the assets. Changes in
estimated economically recoverable ore reserves and resources and useful lives of plant and equipment are accounted
for on a prospective basis from the beginning of the year in which the change arises.
Depreciation for the remaining assets of the Group is provided on the straight-line method to write off the cost or valuation
of relevant assets to their residual values, if any, over their estimated useful lives or life of the mine where appropriate,
whichever is shorter. Freehold or equivalent land has an unlimited useful life and therefore is not depreciated. The
estimated useful lives for these remaining assets are as follows:
Leasehold land
– remaining lease term
Buildings
– 8 to 40 years or the unexpired lease period or life of the mine, whichever is shorter
Plant, equipment and vehicles – 3 to 40 years
Furniture
– 3 to 10 years
Mine restoration
– Life of mine
Capital work-in-progress included in property, plant and equipment are not depreciated as these assets are not 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.
2.12 INVESTMENT PROPERTIES
Investment properties are properties that are either owned by the Group or leased under a finance lease that are held to
earn rentals or for capital appreciation, or both, rather than for use in the production or supply of goods or services, or
for administrative purposes, or in the ordinary course of business. Investment properties comprise completed investment
properties and properties that are being constructed or developed for future use as investment properties. Properties
held under operating leases are classified as investment properties when the definition of investment properties is met.
Investment properties are initially measured at cost, including transaction costs. Subsequent to initial recognition, investment
properties are measured at fair value. 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.
Investment properties are de-recognised when either they have been disposed of or when the investment property is
permanently withdrawn from use and no future economic benefit is expected from its disposal. Any gain or loss on the
retirement or disposal of an investment property is recognised in profit or loss in the year of retirement or disposal.
Transfers are made to or from investment property only when there is a change in use. For a transfer from investment
property to owner-occupied property, the deemed cost for subsequent accounting is the fair value at the date of change
in use. For a transfer from owner-occupied property to investment property, the property is accounted for in accordance
with the accounting policy for property, plant and equipment set out in note 2.10 up to the date of change in use.
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THE STRAITS TRADING COMPANY LIMITED ANNUAL REPORT 2014
