Page 168 - ar2013

CapitaMall Trust Annual Report 2013 166 Clarity
Notes to the
Financial Statements
3 SIGNIFICANT ACCOUNTING POLICIES (continued)
3.2 Plant and equipment (continued)
Depreciation is provided on a straight-line basis so as to write off items of plant and equipment, and major
components that are accounted for separately, over their estimated useful lives as follows:
Furniture, fittings and equipment - 2 to 5 years
Gain or loss arising from the retirement or disposal of plant and equipment is determined by comparing
the proceeds from disposal with the carrying amount of plant and equipment and is recognised in the
Statement of Total Return.
Depreciation methods, useful lives and residual values are reviewed, and adjusted as appropriate, at each
reporting date.
3.3 Investment properties
Investment properties are properties held either to earn rental income or for capital appreciation or both.
Investment properties are accounted for as non-current assets and are stated at initial cost on acquisition
and at fair value thereafter. The cost of a purchased property comprises its purchase price and any directly
attributable expenditure including capitalised borrowing costs. Transaction costs shall be included in
the initial measurement. Fair value is determined in accordance with the Trust Deed, which requires the
investment properties to be valued by independent registered valuers in the following events:
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Any increase or decrease on revaluation is credited or charged to the Statement of Total Return as a
net change in fair value of the investment properties.
When an investment property is disposed of, the resulting gain or loss recognised in the Statement
of Total Return is the difference between net disposal proceeds and the carrying amount of the property.
Investment properties are not depreciated. The properties are subject to continued maintenance and
regularly revalued on the basis set out above. For income tax purposes, the Group and the Trust may claim
capital allowances on assets that qualify as plant and machinery under the Income Tax Act.
3.4 Investment properties under development
Investment properties under development are properties being constructed or developed for future use
as investment properties and are measured at fair value. The difference between the fair value and cost
(including acquisition costs, development expenditure, capitalised borrowing costs and other directly
attributable expenditure) is credited or charged to the Statement of Total Return. Upon completion, the
carrying amounts are reclassified to investment properties.