Chemical Company of Malaysia Berhad Annual Report 2019

2. Significant accounting policies (continued) (d) Property, plant and equipment (continued) (iii) Depreciation (continued) The estimated useful lives for the current and comparative periods are as follows: • Leasehold land           48 years to 96 years • Buildings              10 years to 50 years • Renovation             10 years • Plant, machinery and equipment    2 years to 13 years Depreciation methods, useful lives and residual values are reviewed at the end of the reporting period, and adjusted as appropriate. (e) Leases The Group has applied MFRS 16 using the modified retrospective approach. Accordingly, the comparative information presented for 2018 has not been restated – i.e. it is presented, as previously reported under MFRS 117, Leases and related interpretations. Current financial year (i) Definition of a lease A contract is, or contains, a lease if the contract conveys a right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Group assesses whether: • the contract involves the use of an identified asset – this may be specified explicitly or implicitly, and should be physically distinct or represent substantially all of the capacity of a physically distinct asset. If the supplier has a substantive substitution right, then the asset is not identified; • the customer has the right to obtain substantially all of the economic benefits from the use of the asset throughout the period of use; and • the customer has the right to direct the use of the asset. The customer has this right when it has the decision-making rights that are most relevant to changing how and for what purpose the asset is used. In rare cases where the decision about how and for what purpose the asset is used is predetermined, the customer has the right to direct the use of the asset if either the customer has the right to operate the asset; or the customer designed the asset in a way that predetermines how and for what purpose it will be used. At inception or on reassessment of a contract that contains a lease component, the Group allocates the consideration in the contract to each lease and non-lease component on the basis of their relative stand-alone prices. However, for leases of the properties in which the Group is a lessee, it has elected not to separate non-lease components and will instead account for the lease and non-lease components as a single lease component. BUSINESS OVERVIEW OTHER INFORMATION GOVERNANCE STRUCTURE 139 ANNUAL REPORT 2019 FINANCIAL STATEMENTS