NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2022 (CURRENCY - SINGAPORE DOLLARS UNLESS OTHERWISE STATED) C1 Property, plant and equipment (continued) For this purpose, freehold land, buildings and improvements to premises are considered major properties if the net book value of these assets represent 5% or more of the Group’s aggregated net book value in these categories. Recognition and measurement Property, plant and equipment are carried at cost less accumulated depreciation and accumulated impairment losses. Cost comprises expenditure that is: • directly attributable to the acquisition of the asset; • subsequent costs incurred to replace parts that are eligible for capitalisation; and/or • transfers from equity on qualifying cash flow hedges of foreign currency purchases of property, plant and equipment. Disposals Gains or losses on disposal of property, plant and equipment are included in profit or loss. Depreciation Depreciation of property, plant and equipment is recognised in profit or loss on a straight-line basis over their useful lives, except for freehold land which are not depreciated. The estimated useful lives are as follows: Item # Useful life Buildings and improvements – 2 to 50 years ^ Wharves, floating docks and boats – 10 to 20 years Plant and machinery – 2 to 20 years Production tools and equipment – 2 to 20 years Furniture, fittings, office equipment and others * – 2 to 12 years Aircraft and aircraft engines – 2 to 30 years # Property, plant and equipment purchased specifically for projects are depreciated over the useful life or the duration of the project, whichever is shorter. ^ Refer to Note C1(b) Major Properties for details of the lease tenure used to approximate the useful lives of the leasehold land, buildings and improvements. * Others comprise transportation equipment, vehicles and satellites. Impairment The carrying amounts of property, plant and equipment are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indications exists, then the asset’s recoverable amount is estimated. An impairment loss is recognised if the carrying amount of an asset or its related cash generating unit exceeds its estimated recoverable amount. Estimates and judgement: Depreciation charge Management estimates the useful lives based on factors such as changes in the expected level of usage and technological developments. These are reassessed at each reporting date, and adjusted prospectively, where appropriate. 170 ST ENGINEERING ANNUAL REPORT 2022
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