1994 — Page 52

Notes on the Accounts

d. Depreciation

Depreciation is provided at rates calculated to write off the cost or valuation of fixed assets over their estimated useful lives as follows:

Land held on long leases with

unexpired term in excess of 50 years

Buildings

New buses

Converted or second-hand buses

Light duty coaches and other

motor vehicles

Nil

50 years or over the term of the lease

including extension or renewal

period whichever is less

71% p.a. on cost

142% p.a. on cost

1623% p.a. on cost

Plant and machinery, lifts, fixtures

and equipment

142% p.a. on cost

50% p.a. on reducing balance 20% p.a. on cost

Tools

Computer equipment

e. 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.

f. 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.

2. TURNOVER

Turnover comprises fares and other income from the operation of franchised public buses by the Company.

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The Kowloon Motor Bus Company (1933) Limited