Datasonic Group Berhad Annual Report 2020

DATASONIC GROUP BERHAD I ANNUAL REPORT 2020 (Registration No. 200801008472 (809759-X)) 126 Notes to the Financial Statements for the financial year ended 31 March 2020 (Cont’d) 4. SIGNIFICANT ACCOUNTING POLICIES (CONT’D) 4.8 PROPERTY, PLANT AND EQUIPMENT (CONT’D) Freehold land is not depreciated. Depreciation on other property, plant and equipment is charged to profit or loss (unless it is included in the carrying amount of another asset) on the straight-line method to write off the depreciable amount of the assets over their estimated useful lives. Depreciation of an asset does not cease when the asset becomes idle or is retired from active use unless the asset is fully depreciated. The principal annual rates used for this purpose are:- Furniture and fittings 10% Motor vehicles 20% Office equipment 10% - 33.33% Machineries Over the project output, 10% - 50% Renovation 10% Buildings 2% Leasehold land Not applicable (2019 - Over 54 years) The depreciation method, useful lives and residual values are reviewed, and adjusted if appropriate, at the end of each financial year to ensure that the amounts, method and periods of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic benefits embodied in the items of the property, plant and equipment. Any changes are accounted for as a change in estimate. When significant parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment. Assets-in-progress represent assets under construction, andwhich 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 are 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 difference between the net disposal proceeds and the carrying amount is recognised in profit or loss. 4.9 RESEARCH AND DEVELOPMENT EXPENDITURE Research expenditure is recognised as an expense when it is incurred. Development expenditure is recognised as expense except that expenditure incurred on development projects are capitalised as non-current assets to the extent that such expenditure is expected to generate future economic benefits. Development expenditure is capitalised if, and only if an entity can demonstrate all of the following:- (a) its ability to measure reliably the expenditure 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.