Wah Seong Corporation Berhad Annual Report 2020

120 WAH SEONG CORPORATION BERHAD NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2020 4 PROPERTY, PLANT AND EQUIPMENT (CONTINUED) Building Computer and equipment Renovations, office equipment, furniture and fittings Motor vehicles Total Company RM’000 RM’000 RM’000 RM’000 RM’000 2020 Cost At 1 January 1,850 735 769 708 4,062 Additions - 108 17 - 125 Write-offs - (41) (3) - (44) At 31 December 1,850 802 783 708 4,143 Accumulated depreciation At 1 January 146 650 685 708 2,189 Depreciation charge for the financial year 20 66 30 - 116 Write-offs - (41) (2) - (43) At 31 December 166 675 713 708 2,262 Carrying amount at 31 December 1,684 127 70 - 1,881 2019 Cost At 1 January 1,850 677 767 708 4,002 Additions - 78 3 - 81 Write-offs - (20) (1) - (21) At 31 December 1,850 735 769 708 4,062 Accumulated depreciation At 1 January 126 629 649 708 2,112 Depreciation charge for the financial year 20 41 37 - 98 Write-offs - (20) (1) - (21) At 31 December 146 650 685 708 2,189 Carrying amount at 31 December 1,704 85 84 - 1,873 Impairment of building, plant and equipment Due to the end of a significant pipe coating project in Europe and the adverse impact of Covid-19 pandemic to the pipe coatings market in Europe, impairment indicators exist for the building, plant and equipment in Europe. The Group has performed an impairment assessment on the carrying value of the buildings, plant and equipment used in the pipe coating projects in Europe. The recoverable amount of plant and equipment is fair value less cost of disposal, which is RM5,099,000. Management has measured the recoverable amount of fair value less cost of disposal based on estimation by an independent expert using the market approach where the fair value is estimated based on comparison of market transacted price for similar plant and equipment, and where necessary, adjusted for age, usage and conditions of the plant and equipment and expectation of future market outlook due to the Covid-19 pandemic. The recoverable amount is classified as Level 3 in the fair value hierarchy. Accordingly, RM130,070,000 of impairment loss was recognised for the plant and equipment in the profit or loss.