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Ascott Residence Trust
Annual Report 2015
3 Significant accounting policies
(continued)
3.3 Serviced residence properties
(continued)
Acquisition of serviced residence properties are accounted for by the Group and Trust as acquisition of assets.
Any increase or decrease on revaluation is credited or charged to the statement of total return as a net change
in fair value of the serviced residence properties.
When a serviced residence property is disposed of, the resulting gain or loss recognised in the statement of
total return is the difference between net disposal proceeds and the carrying amount of the property.
Serviced residence properties are not depreciated. The properties are subject to continual maintenance and
regularly revalued on the basis set out above.
3.4 Plant and equipment
Recognition and measurement
Plant and equipment are measured at cost less accumulated depreciation and accumulated impairment
losses. Cost includes expenditure that is directly attributable to the acquisition of the asset.
Purchased software that is integral to the functionality of the related equipment is capitalised as part of that
equipment.
When parts of an item of plant and equipment have different useful lives, they are accounted for as separate
items (major components) of plant and equipment.
Gains and losses on disposal of an item of plant and equipment are determined by comparing the proceeds
from disposal with the carrying amount of plant and equipment, and are recognised net within other income/
other expenses in total return.
Subsequent costs
The cost of replacing a component of an item of plant and equipment is recognised in the carrying amount
of the item if it is probable that the future economic benefits embodied within the component will flow to the
Group, and its cost can be measured reliably. The carrying amount of the replaced component is derecognised.
The costs of the day-to-day servicing of plant and equipment are recognised in total return as incurred.
Depreciation
Depreciation is calculated over the depreciable amount, which is the cost of an asset, or other amount
substituted for cost, less its residual value.
Depreciation is recognised in the statement of total return on a straight-line basis over the estimated useful
lives of each component of an item of plant and equipment. Leased assets are depreciated over the shorter
of the lease term and their useful lives unless it is reasonably certain that the Group will obtain ownership by
the end of the lease term.
The estimated useful lives for the current and comparative periods are as follows:
Renovation
- 8 to 12 years
Motor vehicles
- 5 years
Office equipment, computers and furniture - 3 to 8 years
Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if
appropriate.
