3 SIGNIFICANT ACCOUNTING POLICIES
(continued)
3.1 Consolidation
(continued)
Associate and joint ventures
(continued)
Investments in an associate and joint ventures are accounted for using the equity method.
They are recognised initially at cost, which includes transaction costs. Subsequent to
initial recognition, the consolidated financial statements include the Group’s share of profit
or loss and other comprehensive income of equity-accounted investees, after adjustments
to align the accounting policies with those of the Group, from the date that significant
influence or joint control commences until the date that significant influence or joint control
ceases.
When the Group’s share of losses exceeds its interest in an equity-accounted investee, the
carrying amount of that investment (including any long-term investments) is reduced to
zero and the recognition of further losses is discontinued except to the extent that the
Group has an obligation to fund the investee’s operations or has made payment on behalf
of the investee.
Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealised income or expenses arising
from intra-group transactions, are eliminated in preparing the consolidated financial
statements. Unrealised gains arising from transactions with equity-accounted investees
are eliminated against the investment to the extent of the Group’s interest in the investees.
Unrealised losses are eliminated in the same way as unrealised gains, but only to the
extent that there is no evidence of impairment.
Accounting for subsidiaries, associate and joint ventures by the Trust
Investments in subsidiaries, associate and joint ventures are stated in the Trust’s
statement of financial position at cost less accumulated impairment losses.
3.2 Plant and equipment
Plant and equipment are measured at cost less accumulated depreciation and impairment
losses. Cost includes expenditure that is directly attributable to the acquisition of the
asset.
When parts of an item of plant and equipment have different useful lives, they are
accounted for as separate items (major components) of plant and equipment.
The cost of replacing part of an item of plant and equipment is recognised in the carrying
amount of the item if it is probable that the future economic benefits embodied within the
part will flow to the Group and its cost can be measured reliably. The costs of the
day-to-day servicing of plant and equipment are recognised in the Statement of Total
Return as incurred.
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.
Leading with Confidence | 157
