Wah Seong Corporation Berhad Annual Report 2019

120 WAH SEONG CORPORATION BERHAD NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019 4 PROPERTY, PLANT AND EQUIPMENT (CONTINUED) Note Building Computer and equipment Renovations, office equipment, furniture and fittings Motor vehicles Total Company RM’000 RM’000 RM’000 RM’000 RM’000 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 2018 Cost At 1 January 4,025 664 898 708 6,295 Additions - 55 26 - 81 Disposals - - (24) - (24) Write-offs - (42) (133) - (175) Transfer to investment properties 7 (2,175) - - - (2,175) At 31 December 1,850 677 767 708 4,002 Accumulated depreciation At 1 January 230 636 681 708 2,255 Depreciation charge for the financial year 20 35 45 - 100 Disposals - - (24) - (24) Write-offs - (42) (53) - (95) Transfer to investment properties 7 (124) - - - (124) At 31 December 126 629 649 708 2,112 Carrying amount at 31 December 1,724 48 118 - 1,890 Impairment of building, plant and equipment For the financial year ended 31 December 2019, the market conditions for the oil and gas sector saw decreased demand which affected the utilisation of the Group’s property, plant and equipment. Given this impairment indicator, management carried out an impairment assessment. Based on the recoverable amount which was estimated using fair value less costs of disposal, an impairment charge amounting to RM34,684,000 (2018: nil) was made on certain building, plant and equipment that were idle and were also not forecast to generate sufficient future economic benefits in the financial year ended 31 December 2019. The fair value less costs of disposal was determined based on selling prices agreed with willing buyers amounting to EUR9,650,000 (equivalent to RM44,249,000). The fair value less costs of disposal is classified as Level 3 in the fair value hierarchy.