Serba Dinamik Annual Report 2021

Registration No: 201501042584 (1167905-P) Serba Dinamik Holdings Berhad (Incorporated in Malaysia) 34 3. Significant accounting policies (continued) (c) Leases (continued) (iii) Subsequent measurement As a lessee The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of right-of-use assets are determined on the same basis as those of property, plant and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability. Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of the assets, as follows: Rented buildings 3 – 5 years Tools and equipment 5 – 10 years Motor vehicles 5 – 10 years Plant and machinery 10 – 14 years Land use rights 99 years Leasehold land of the Group is amortised over the period of the respective leases which range from 55 to 60 years. The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a revision of in-substance fixed lease payments, or if there is a change in the Group’s estimate of the amount expected to be payable under a residual value guarantee, or if the Group changes its assessment of whether it will exercise a purchase, extension or termination option. When the lease liability is remeasured, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use has been reduced to zero. As a lessor The Group recognises lease payments received under operating leases as income on a straight-line basis over the lease term as part of “other operating income”.