Tropicana Corporation Berhad Annual Report 2019

For the financial year ended 31 December 2019 Notes to the Financial Statements 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D.) 2.6 Financial instruments - initial recognition and subsequent measurement (cont’d.) (b) Financial liabilities (cont’d.) Derecognition A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement of profit or loss. (c) Offsetting of financial instruments Financial assets and financial liabilities are offset and the net amount is reported in the statement of financial position if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously. 2.7 Property, plant and equipment All items of property, plant and equipment are initially recorded at cost. The cost of an item of property, plant and equipment is recognised as an asset if, and only if, it is probable that future economic bene ts associated with the item will ow to the Group and the Company and the cost of the item can be measured reliably. Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of materials, direct labour, any other costs directly attributable to bringing the assets to working condition for its intended use, and the costs of dismantling and removing the items and restoring the site on which they are located, for which the Group and the Company is obligated to incur, if applicable. Subsequent to initial recognition, property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses, if any. When significant parts of property, plant and equipment are required to be replaced at intervals, the Group and the Company recognise such parts as individual assets with specific useful lives and depreciates them accordingly. The carrying amount of parts that are replaced is derecognised. Likewise, when a major inspection is performed, its cost is recognised in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognised in profit or loss as incurred. Freehold land, has unlimited useful life, and therefore is not depreciated. Construction in-progress are not depreciated as these assets are not yet available for use. Depreciation is computed on a straight-line basis over the estimated useful lives of the assets as follows: - Freehold buildings: 20 to 50 years - Leasehold buildings: 20 to 50 years - Golf course: 99 years - Plant and machineries: 5 to 20 years - Office furniture, fittings and equipment: 4 to 10 years - Motor vehicles: 5 years Tropicana Corporation Berhad Annual Report 2019 pg 138 About Tropicana Our Strategic Performance Our Leadership