2. Summary of material accounting policies (cont'd.) 2.8 Property, plant and equipment Property, plant and equipment are stated at cost less accumulated depreciaঞon and impairment losses. The cost of an item of property, plant and equipment includes expenditure that is directly aributable to the acquisiঞon of an asset. When significant parts of plant and equipment are required to be replaced at intervals, the Group depreciates them separately based on their specific useful lives. Subsequent costs are included in the carrying amount of asset when it is probable that future economic benefits associated with the asset will flow to the Group and the cost of the asset can be measured reliably. All other repairs and maintenance costs are charged to profit or loss during the financial year in which they are incurred. Gain or loss arising from the disposal of an asset is determined as the difference between the net disposal proceeds and the carrying amount of the asset, and is recognised in profit or loss. Freehold land has an unlimited useful life and therefore is not depreciated. Capital work- in-progress is not depreciated as the asset is not available for intended use. Depreciaঞon is computed on a straight-line method to write off the cost of property, plant and equipment over their esঞmated useful lives at the following annual rates: Buildings 2% Office equipment, furniture and fiমngs 10% - 20% Plant and machinery 10% Motor vehicles 15% The residual values, useful lives and depreciaঞon method are reviewed at each financial year-end, and adjusted prospecঞvely, if appropriate, to ensure that the amount, method and period of depreciaঞon are consistent with the expected paern of consumpঞon of the future economic benefits embodied in the items of property, plant and equipment. 2.9 Leases (i) Group as a Lessor Leases where the Group retain substanঞally all the risks and rewards of ownership of the asset are classified as operaঞng leases. When the assets are leased out under an operaঞng lease, the asset is included in the statement of financial posiঞon based on the nature of the asset. (ii) Group as a Lessee (a) Right-of-use assets Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the esঞmated useful lives of the assets, as follows: Buildings 1 to 5 years (b) Lease liabiliঞes In calculaঞng the present value of lease payments, the Group uses its incremental borrowing rate at the lease commencement date because the interest rate implicit in the lease is not readily determinable. notes to the financial statements 31 march 2025 (cont’d.) 167 MATRIX CONCEPTS HOLDINGS BERHAD INTEGRATED ANNUAL REPORT 2025 07 FINANCIAL STATEMENTS
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