QL Resources Berhad (428915-X)
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2. Significant accounting policies (Cont’d)
(d) Property, plant and equipment (Cont’d)
(iii) Depreciation
Depreciation is based on the cost of an asset less its residual value. Significant components of individual
assets are assessed, and if a component has a useful life that is different from the remainder of that asset,
then that component is depreciated separately.
Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of each
component of an item of property, plant and equipment from the date they are available for use. Leased assets
are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the
Group or the Company will obtain ownership by the end of the lease term. Freehold land is not depreciated.
Property, plant and equipment under construction are not depreciated until the assets are ready for their
intended use.
The estimated useful lives for the current and comparative periods are as follows:
Long term leasehold land 49 - 912 years
Buildings and improvements 4 - 50 years
Farm buildings 10 - 50 years
Fishing boat and equipment 5 - 20 years
Furniture, fittings and equipment 4 - 12.5 years
Plant and machinery 4 - 15 years
Office improvements and renovation 5 - 10 years
Motor vehicles 5 - 10 years
Depreciation methods, useful lives and residual values are reviewed at end of the reporting period, and
adjusted as appropriate.
(e) Leased assets
(i) Finance lease
Leases in terms of which the Group or the Company assumes substantially all the risks and rewards of
ownership are classified as finance leases. Upon initial recognition, the leased asset is measured at an amount
equal to the lower of its fair value and the present value of the minimum lease payments. Subsequent to initial
recognition, the asset is accounted for in accordance with the accounting policy applicable to that asset.
Minimum lease payments made under finance leases are apportioned between the finance expense and the
reduction of the outstanding liability. The finance expense is allocated to each period during the lease term so
as to produce a constant periodic rate of interest on the remaining balance of the liability. Contingent lease
payments are accounted for by revising the minimum lease payments over the remaining term of the lease
when the lease adjustment is confirmed.
Leasehold land which in substance is a finance lease is classified as property, plant and equipment, or as
investment property if held to earn rental income or for capital appreciation or for both.
Notes to the Financial Statements
(Cont’d.)
