China Communications Services Corporation Limited Annual Report 2015
109
NOTES TO THE
CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 December 2015
2. SIGNIFICANT ACCOUNTING POLICIES
(continued)
(f) Investment properties
Investment properties are land or/and buildings which are owned to earn rental income and/or for capital
appreciation.
Investment properties are stated in the consolidated statement of financial position at cost less accumulated
depreciation and impairment losses (see note 2(l)). Depreciation is calculated to write off the cost less estimated
residual value if applicable and is charged to profit or loss on a straight-line basis over the estimated useful lives
ranging from 20 years to 30 years.
Rental income from investment properties is accounted for as described in note 2(w)(iv).
When an item of property, plant and equipment is transferred to investment property evidenced by end of owner-
occupation or when an investment property commencement of owner-occupation and reclassified as property, plant
and equipment, its costs at the date of reclassification becomes its cost for accounting purposes.
(g) Property, plant and equipment
Property, plant and equipment are initially recorded at cost, less subsequent accumulated depreciation and
impairment losses (see note 2(l)). The cost of an asset comprises its purchase price, any directly attributable costs of
bringing the asset to working condition and location for its intended use and the cost of borrowed funds used during
the periods of construction. Expenditure incurred after the asset has been put into operation, including cost of
replacing part of such an item, is capitalised only when it increases the future economic benefits embodied in the
item of property, plant and equipment and the cost can be measured reliably. All other expenditure is expensed as it
is incurred.
Gains or losses arising from the retirement or disposal of an item of property, plant and equipment are determined as
the difference between the net disposal proceeds and the carrying amount of the item and are recognised in profit or
loss on the date of retirement or disposal.
Depreciation is provided to write off the cost of items of property, plant and equipment, less their estimated residual
value, if any, using the straight-line method over their estimated useful lives as follows:
Buildings
20–30 years
Building improvements
5 years
Motor vehicles
5–10 years
Furniture, fixtures and other equipment
3–20 years
The useful life of an asset and its residual value, if any, and depreciation method are reviewed annually.
