Maxis Berhad | Annual Report 2013

89 OVERVIEW OUR BUSINESS STRATEGIC REVIEW CORPORATE GOVERNANCE FINANCIAL STATEMENTS Maxis Berhad Annual Report 2013 OTHER INFORMATION 3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (c) Property, plant and equipment Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses. Cost includes expenditure that is directly attributable to the acquisition of property, plant and equipment. The cost of certain property, plant and equipment items include the costs of dismantling and removing the item and restoring the sites on which these items are located. These costs are due to obligations incurred either when the items were installed or as a consequence of having used these items during a particular period. Certain telecommunication assets are stated at the amount of cash or cash equivalent that would have to be paid if the same or an equivalent asset was acquired. Included in telecommunications equipment are purchased computer software costs which are integral to such equipment. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to the statement of profit or loss during the financial year in which they are incurred. Freehold land is not depreciated as it has an indefinite life. Leasehold lands and buildings held for own use are classified as operating or finance leases in the same way as leases of other assets. Long-term leasehold land is land with a remaining lease period exceeding 50 years. Leasehold land is amortised over the lease term on a straight line method, summarised as follows: Long-term leasehold land 77 – 90 years Short-term leasehold land 50 years All property, plant and equipment are depreciated on the straight line method to write-off the cost of each category of assets to its residual value over its estimated useful life, summarised as follows: Buildings 42 – 50 years Telecommunications equipment 2 – 25 years Submarine cables (included within telecommunications equipment) 10 – 25 years Site decommissioning works (included within telecommunications equipment) 15 years Motor vehicles 5 years Office furniture, fittings and equipment 3 – 7 years Capital work-in-progress and capital inventories comprising mainly telecommunications equipment, submarine cables and renovations are not depreciated until they are ready for their intended use. Residual values and useful lives are reassessed and adjusted, if appropriate, at each reporting date. At each reporting date, the Group assesses whether there is any indication of impairment. Where an indication of impairment exists, the carrying amount of the asset is assessed and written down immediately to its recoverable amount. See accounting policy Note 3(g)(i) on impairment of non-financial assets. Gains and losses on disposals are determined by comparing proceeds with carrying amounts and are included in the statement of profit or loss.