2. SUMMARY OF MATERIAL ACCOUNTING POLICIES (CONTINUED) 2.13 Interests in joint arrangements (Continued) Investments in joint operations (Continued) The Group as joint operators recognise in relation to their interests in joint operations: (i) their assets, including their shares of any assets held jointly; (ii) their liabilities, including their shares of any liabilities incurred jointly; (iii) their revenue from the sale of their shares of the output arising from the joint operations; (iv) their shares of the revenue from the sale of the output by the joint operations; and (v) their expenses, including their shares of any expenses incurred jointly. The Group accounts for assets, liabilities, revenues and expenses relating to its interest in a joint operation in accordance with the accounting policies applicable to the particular assets, liabilities, revenues and expenses. 2.14 Property, plant and equipment Property, Plant and equipment are stated at cost less accumulated depreciation and any accumulated impairment losses. The cost of plant and equipment includes its purchase price and any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. Dismantlement, removal or restoration costs are included as part of the cost of plant and equipment if the obligation for dismantlement, removal or restoration is incurred as a consequence of acquiring or using the plant and equipment. Subsequent expenditure relating to property, plant and equipment is added to the carrying amount of the asset only when it is probable that future economic benefits associated with the item will flow to the entity and the cost of the item can be measured reliably. All other repair and maintenance expenses are recognised in profit or loss when incurred. Depreciation is charged so as to write off the cost of assets over their estimated useful lives, using the straight-line method, on the following bases: Years – Building 10 – 17 – Office equipment 2 – 3 – Furniture and fittings 3 – 5 – Motor vehicles 5 – Plant and machinery 3 – 5 For right-of-use assets for which ownership of the underlying asset is not transferred to the Group by the end of the lease term, depreciation is charged over the lease term, using the straight-line method. The lease periods are disclosed in Note 27. No depreciation is charged on building under construction as this asset is not yet in use as at the end of the financial year. 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 estimated useful lives, residual values and depreciation methods are reviewed, and adjusted as appropriate, at the end of each financial year. The gain or loss, being the difference between the sales proceeds and the carrying amount of the asset, arising on disposal or retirement of an item of property, plant and equipment is recognised in profit or loss. Any amount in the revaluation reserve relating to that asset is transferred to accumulated profits directly. Fully depreciated property, plant and equipment are retained in the financial statements until they are no longer in use. ANNUAL REPORT 2025 KEONG HONG HOLDINGS LIMITED 75 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2025
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