ANNUAL REPORT 2016
54
Techno
Dex
Berhad
(627634-A)
4. SIGNIFICANT ACCOUNTING POLICIES (continued)
4.7 PROPERTY, PLANT AND EQUIPMENT (continued)
Depreciation is charged to profit or loss on the straight-line method to write off the depreciable amount of
the assets over their estimated useful lives. Freehold land is not depreciated. Depreciation of an asset does
not cease when the asset becomes idle or is retired from active use unless the asset is fully depreciated. The
principal annual rates used for this purpose are:-
Buildings
2%
Air conditioners
15%
Computer and software
20% - 40%
Furniture and fittings
10% - 15%
Machineries
14%
Motor vehicle
20%
Office equipment
10% - 15%
Telecommunication equipment
15%
Renovation
15% - 20%
The depreciation method, useful lives and residual values are reviewed, and adjusted if appropriate, at the
end of each reporting period to ensure that the amounts, method and periods of depreciation are consistent
with previous estimates and the expected pattern of consumption of the future economic benefits embodied
in the items of the property, plant and equipment.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as
appropriate, only when the cost is incurred and it is probable that the future economic benefits associated
with the asset will flow to the Group and the cost of the asset can be measured reliably. The carrying amount
of parts that are replaced is derecognised. The costs of the day-to-day servicing of property, plant and
equipment are recognised in profit or loss as incurred. Cost also comprises the initial estimate of dismantling
and removing the asset and restoring the site on which it is located for which the Group is obligated to incur
when the asset is acquired, if applicable.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits
are expected from its use. Any gain or loss arising from derecognition of the asset is recognised in profit or
loss.
4.8 RESEARCH AND DEVELOPMENT EXPENDITURE
Research expenditure is recognised as an expense when it is incurred.
Development expenditure is recognised as an expense except that costs incurred on development projects
are capitalised as long-term assets to the extent that such expenditure is expected to generate future
economic benefits. Development expenditure is capitalised if, and only if an entity can demonstrate all of the
following:-
(a)
its ability to measure reliably the expenditure attributable to the asset under development;
(b) the product or process is technically and commercially feasible;
(c)
its future economic benefits are probable;
(d) its ability to use or sell the developed asset; and
(e)
the availability of adequate technical, financial and other resources to complete the asset under
development.
NOTES TO THE
FINANCIAL STATEMENTS
(continued)
