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Datasonic Group Berhad
(Company No. 809759-X)
90
NOTES TO THE FINANCIAL STATEMENTS
for the financial year ended 31 March 2016
(Continued)
4.
SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
4.8 PROPERTY, PLANT AND EQUIPMENT (Cont’d)
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.
Assets-in-progress represent assets under construction, and which are not ready for commercial
use at the end of the financial year. Assets-in-progress are stated at cost, and is transferred to
the relevant category of assets and depreciated accordingly when the assets are completed
and ready for commercial use.
Cost of assets-in-progress include direct cost, related expenditure and interest cost on borrowings
taken to finance the construction or acquisition of the assets to the date that the assets are
completed and put into use.
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, being the different between the net disposal proceeds and the carrying amount is
recognised in profit or loss.
4.9 RESEARCH AND DEVELOPMENT EXPENDITURES
Research expenditure is recognised as an expense when it is incurred.
Development expenditures are recognised as expense except that expenditures incurred on
development projects are capitalised as non-current assets to the extent that such expenditures
are expected to generate future economic benefits. Development expenditures are capitalised
if, and only if an entity can demonstrate all of the following:-
(a) its ability tomeasure reliably the expenditures 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 intention to complete and the 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.
Capitalised development expenditures are measured at cost less accumulated amortisation
and impairment losses, if any. Development expenditures initially recognised as expenses are
not recognised as assets in the subsequent period.
The development expenditures are amortised on a unit of production method over the life of
the project when the products are ready for sale or use. In the event that the expected future
economic benefits are no longer probable of being recovered, the development expenditures
are written down to its recoverable amount.
The amortisationmethod, useful life and residual value are reviewed, and adjusted if appropriate,
at the end of each financial year.