96
ANNUAL REPORT 2016
NOTES TOTHE FINANCIAL STATEMENTS
30 JUNE 2016
(Continued)
4.
SIGNIFICANT ACCOUNTING POLICIES (continued)
4.5 Leases and hire purchase (continued)
(c)
Leases of land and buildings
For leases of land and buildings, the land and buildings elements are considered separately for the purpose of lease classification
and these leases are classified as operating or finance leases in the same way as leases of other assets.
The minimum lease payments including any lump-sum upfront payments made to acquire the interest in the land and buildings
are allocated between the land and the buildings elements in proportion to the relative fair values of the leasehold interests in
the land element and the buildings element of the lease at the inception of the lease.
For a lease of land and buildings in which the amount that would initially be recognised for the land element is immaterial, the
land and buildings are treated as a single unit for the purpose of lease classification and is accordingly classified as a finance
or operating lease. In such a case, the economic life of the buildings is regarded as the economic life of the entire leased asset.
4.6 Investment properties
Investment properties are properties which are held to earn rental yields or for capital appreciation or for both and are not occupied
by the Group. Investment properties also include properties that are being constructed or developed for future use as investment
properties. Investment properties are initially measured at cost, which includes transaction costs. After initial recognition, investment
properties are stated at fair value.
If the Group determines that the fair value of an investment property under construction is not reliably determinable but expects
the fair value of the property to be reliably determinable when construction is complete, the Group shall measure that investment
property under construction at cost until either its fair value becomes reliably determinable or construction is completed (whichever
is earlier). Once the Group is able to measure reliably the fair value of an investment property under construction that has previously
been measured at cost, the Group shall measure that property at its fair value.
The fair value of investment properties reflect among other things, rental income from current leases and other assumptions that
market participants would use when pricing investment properties under current market conditions.
Fair values of investment properties are based on valuations by registered independent valuers with appropriate recognised professional
qualification and has recent experience in the location and category of the investment properties being valued.
A gain or loss arising from a change in the fair value of investment properties is recognised in profit or loss for the period in which it
arises.
Investment properties are derecognised when either they have been disposed of or when they are permanently withdrawn from
use and no future economic benefit is expected from their disposal. The gains or losses arising from the retirement or disposal of
investment property is determined as the difference between the net disposal proceeds, if any, and the carrying amount of the asset
and is recognised in profit or loss in the period of the retirement or disposal.
4.7 Investments
(a)
Subsidiaries
A subsidiary is an entity in which the Group and the Company are exposed, or have rights, to variable returns from its
involvement with the subsidiary and have the ability to affect those returns through its power over the subsidiary.
An investment in subsidiary, which is eliminated on consolidation, is stated in the separate financial statements of the Company
at cost. Put options written over non-controlling interests on the acquisition of subsidiary shall be included as part of the cost of
investment in the separate financial statements of the Company. Subsequent changes in the fair value of the written put options
over non-controlling interests shall be recognised in profit or loss. Investments accounted for at cost shall be accounted for in
accordance with MFRS 5
Non-current Assets Held for Sale and Discontinued Operations
when they are classified as held for
sale (or included in a disposal group that is classified as held for sale) in accordance with MFRS 5.
When control of a subsidiary is lost as a result of a transaction, event or other circumstance, the Group would derecognise
all assets, liabilities and non-controlling interests at their carrying amount and to recognise the fair value of the consideration
received. Any retained interest in the former subsidiary is recognised at its fair value at the date control is lost. The resulting
difference is recognised as a gain or loss in profit or loss.
