Page 42 - FOR FLIP BOOK [single page]Cluster report 2018-2020 (1)

New Territories East Cluster
Notes to the Financial Statements (Continued)

6. Property, plant and equipment (Continued)

(a) Capitalisation of property, plant and equipment

(i) The following types of assets which give rise to economic benefits have been capitalised:

Building projects costing HK$250,000 or more; and

All other assets costing HK$100,000 or more on an individual basis.

The accounting policy for depreciation of property, plant and equipment is set out in note 6(b).

(ii) Expenditureon furniture,fixtures, equipment,motor vehiclesandcomputer hardware iscapitalised(subject
to theminimum expenditure limits setoutin note6(a)(i) above)andthecorrespondingamounts arecredited
to thecapitalsubventions andcapitaldonations accounts for capitalexpenditure funded by theGovernment
and donations respectively.

(b) Depreciation
Property, plant and equipmentare statedat cost less accumulated depreciation.Additions representnew or
replacement of specific components of an asset. An asset’ s carrying value is written downimmediately to its
recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount.

The historicalcostof assetsacquired and the valueof donated assetsaredepreciatedusing the straight-line
method over the expected useful lives of the assets as follows:

Buildings 20-50 years
Furniture, fixtures and equipment 3-10 years

M v r o t o e s e l c i h 5-7 years
Computer equipment 3-6 years

The useful lives of assets are reviewed and adjusted, if appropriate, at each balance sheet date.

Appendices - A. Financial Report
The gainor loss arisingfromdisposalor retirement of an assetis determined as thedifference betweenthesales
proceeds and the carrying amount of the asset and is recognised in the statement of income and expenditure.

Capital expenditure in progress is not depreciated until the asset is placed into commission.

(c) Amortisation

Computer software and systems including related development costs costingHK$250,000 or moreeach, which
give rise to economicbenefits are capitalisedas intangibleassets. Intangible assets are statedat cost less
accumulated amortisation and are amortised on a straight line basis over the estimated useful lives of 1 to
3 years.