2
BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES CONTINUED¡
(e) Fixed assets
Fixed assets are stated at cost less depreciation and any impairment loss. Properties comprise buildings and civil works.
Buildings and civil works are depreciated on the basis of an expected life of 50 years, or the remainder thereof, or over
the remaining period of the lease of the underlying leasehold land and land use rights, whichever is lesser. The period of
the lease includes the period for which a right of renewal is attached. Other assets comprise motor vehicles, computer
equipment and other fixed assets.
Depreciation of fixed assets other than properties is provided at rates calculated to write o
their costs to their residual
values over their estimated useful lives on a straight line basis as follows:
Container handling equipment
10 - 30 years
Barges
15 years
Motor vehicles
5 years
Computer equipment
5 years
Other fixed assets
5 - 25 years
In prior years, depreciation of container handling equipment was calculated to write-o
their cost on a straight line
basis over their estimated useful lives of 10 - 35 years. With e
ect from 1 August 2015, depreciation of container handling
equipment is calculated to write-o
their cost over their estimated useful lives of 10 - 30 years. This represents a change in
accounting estimate and is accounted for prospectively. As a result of this change, the net book value of fixed assets as at
31 December 2015 and the profit before tax for the year ended 31 December 2015 have been decreased by approximately
HK$32,000,000.
The gain or loss on disposal or retirement of a fixed asset is the di
erence between the net sales proceeds and the carrying
amount of the relevant asset, and is recognised in the income statement.
(f) Projects under development
Projects under development are carried at cost and include project development expenditure and capitalised interest on
related loans incurred up to the date of completion. On completion, projects under development are transferred to fixed assets.
(g) Leasehold land and land use rights
The acquisition costs and upfront payments made for leasehold land and land use rights are presented on the statement of
financial position as leasehold land and land use rights and expensed in the income statement on a straight-line basis over
the period of the lease/rights.
(h) Customer relationships
Customer relationships, which are acquired in a business combination, are recognised at fair value at the acquisition date.
Customer relationships are carried at cost less accumulated amortisation. Amortisation is calculated using the straight-line
method over the expected life of the customer relationships, ranging from approximately 23 to 33 years.
Notes to the
Financial Statements
079
ANNUAL REPORT 2015
HUTCHISON PORT HOLDINGS TRUST
