f.
NOTES ON THE ACCOUNTS
e.
Amortisation and depreciation
Amortisation and depreciation is provided at rates calculated to write off the cost or
valuation of fixed assets over their estimated useful lives as follows:
Leasehold land
Buildings
New buses
Light duty coaches and other
motor vehicles
Over the terms of the leases
50 years or over the term of the lease
including extension or renewal
period whichever is less
7% p.a. on cost
163% p.a. on cost
Plant and machinery, lifts, fixtures
and equipment
14% p.a. on cost
Tools
Computer equipment
50% p.a. on reducing balance
20% p.a. on cost
In accordance with Statement of Standard Accounting Practice (“SSAP") 17 "Property plant and equipment”, and with effect from the current financial year, all leasehold land is to be depreciated over its remaining useful life. This amounts to a change in accounting policy for the Company as previously leasehold land was not depreciated until the remaining lease term was 50 years or less. As a result of the new policy, which has been applied prospectively, additional depreciation of HK$2,142,000 has been charged to the profit and loss account in the current year and is expected to be charged in future years.
Leased assets
Payments under operating leases are charged to the profit and loss account on a straight line basis over the periods of the respective leases.
1
g.
Deferred taxation
Deferred taxation is provided using the liability method in respect of the taxation effect arising from all timing differences which are expected with reasonable probability to crystallise in the foreseeable future.
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