2.
Summary of significant accounting policies (cont’d)
Goodwill (cont’d)
For the purpose of impairment testing and since the acquisition date of the business combination, goodwill is allocated
to each cash-generating unit, or groups of cash-generating units that are expected to benefit from the synergies of the
business combination, irrespective of whether other assets or liabilities of the acquiree were assigned to those units
or groups of units. Each unit or group of units to which the goodwill is so allocated represents the lowest level within
the Group at which the goodwill is monitored for internal management purposes and is not larger than a segment.
Goodwill and fair value adjustments arising on the acquisition of foreign operations on or after 1 January 2005 are treated
as assets and liabilities of the foreign operations and are recorded in the functional currency of the foreign operations
and translated in accordance with the accounting policy on translation of financial statements of other entities.
Goodwill and fair value adjustments which arose on the acquisition of foreign operations before 1 January 2005 are
deemed to be assets and liabilities of the Company and are recorded in SGD at the exchange rates prevailing at the
date of acquisition.
Land use right
Land use right is initially measured at cost. Following initial recognition, land use right is measured at cost less any
accumulated amortisation and accumulated impairment losses. The land use right is amortised on a straight-line basis
over the lease term of 30 years.
Property, plant and equipment
Property, plant and equipment are carried at cost on initial recognition and after initial recognition, other than freehold
land, at cost less any accumulated depreciation and accumulated impairment losses. The carrying amounts of property,
plant and equipment are reviewed for impairment when events or changes in circumstances indicate that the carrying
amounts may not be recoverable.
Cost includes acquisition cost, borrowing cost capitalised and any cost directly attributable to bringing the asset
or component to the location and condition necessary for it to be capable of operating in the manner intended by
management. Subsequent costs are recognised as an asset only when it is probable that future economic benefits
associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and
maintenance are charged to profit or loss when they are incurred.
Depreciation is provided on a straight-line basis to allocate the gross carrying amounts of the assets less their residual
values over their estimated useful lives of each part of an item of these assets. Freehold land has an unlimited useful life
and therefore is not depreciated. The estimated annual rates of depreciation are as follows:
Buildings
– 2%
Machinery and exhibition equipment
– 10% – 50%
Office equipment, computers and software – 10% – 33.33%
Motor vehicles
– 10% – 25%
Furniture and fittings
– 8% – 20%
Renovations
– 10% – 30%
Assets under construction included in property, plant and equipment are not depreciated as these assets are not
available for use.
An asset is depreciated when it is available for use until it is derecognised even if during that period the item is idle. Fully
depreciated assets still in use are retained in the financial statements.
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