144 KEYFIELD INTERNATIONAL BERHAD 202001038989 (1395310-M) NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2024 (cont’d) 4. MATERIAL ACCOUNTING POLICY INFORMATION (CONT’D) 4.2 FINANCIAL INSTRUMENTS (CONT’D) (c) Equity Ordinary Shares and Cumulative Redeemable Convertible Preference Shares (“CRCPS”) Ordinary shares and CRCPS are recorded on initial recognition at the proceeds received less directly attributable transaction costs incurred. The ordinary shares and CRCPS are not remeasured subsequently. (d) Financial Guarantee Contracts Financial guarantee contracts are recognised initially as liabilities at fair value, net of transaction costs. Subsequent to initial recognition, the financial guarantee contracts are recognised as income in profit or loss over the period of the guarantee or, when there is no specific contractual period, recognised in profit or loss upon discharge of the guarantee. If the debtor fails to make payment relating to a financial guarantee contract when it is due and the Company, as the issuer, is required to reimburse the holder for the associated loss, the reimbursement is recognised as a liability and measured at the higher of the amount of loss allowance determined using the expected credit loss model and the amount financial guarantee initially recognised less cumulative amortisation. 4.3 INVESTMENTS IN SUBSIDIARIES Investments in subsidiaries including the share options granted to employees of the subsidiaries, which are eliminated on consolidation, are stated in the separate financial statements of the Company at cost less impairment losses, if any. 4.4 INVESTMENTS IN ASSOCIATES Investments in associates are accounted for using the equity method in the consolidated financial statements of the Group. 4.5 PROPERTY, PLANT AND EQUIPMENT All items of property, plant and equipment are initially measured at cost. Subsequent to the initial recognition, all property, plant and equipment are stated at cost less accumulated depreciation and any accumulated impairment losses. Depreciation on property, plant and equipment is calculated using the straight-line method to allocate their depreciable amounts over the estimated useful lives. The principal annual depreciation rates are:- Vessels Over the remaining useful life of up to 25 years Vessel equipment 20% Dry docking expenditure 20% Motor vehicles 20% Office equipment 20% Renovation 20% Dry docking expenditure represents major inspection and overhaul costs and is depreciated to reflect the consumption of benefits, which are to be replaced or restored by the subsequent dry docking generally every five years. Capital work-in-progress represents assets under construction and dry docking in progress. They are not depreciated until such time when the asset is available for use.
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