187 ANNUAL REPORT 2025 MST GOLF GROUP BERHAD 2. BASIS OF PREPARATION (CONT’D) 2.7 Significant accounting estimates and judgements Estimates, assumptions concerning the future and judgements are made in the preparation of the financial statements. They affect the application of the Group’s and of the Company’s accounting policies and reported amounts of assets, liabilities, income and expenses, and disclosures made. Estimates and underlying assumptions are assessed on an ongoing basis and are based on experience and relevant factors, including expectations of future events that are believed to be reasonable under the circumstances. The actual results may differ from the judgements, estimates and assumptions made by management, and will seldom equal the estimated results. 2.7.1 Estimation uncertainties Information about significant judgements, estimates and assumptions that have the most significant effect on recognition and measurement of assets, liabilities, income and expenses are discussed below. Useful lives of depreciable assets The management estimates the useful lives of the property, plant and equipment and right-of-use assets to be between 2 to 50 years and reviews the useful lives of depreciable assets at end of each reporting date. The management assesses that the useful lives represent the expected utility of the assets to the Group. Actual results, however, may vary due to change in the expected level of usage and technological developments, which resulting the adjustment to the Group’s assets. The carrying amount of the Group’s property, plant and equipment and right-of-use assets at the reporting period are disclosed in Notes 3 and 4 to the financial statements. Inventories Inventories are measured at the lower of cost and net realisable value. In estimating net realisable values, management takes into account the most reliable evidence available at the times the estimates are made. The Group’s core business is subject to economic changes which may cause selling prices to change rapidly, and the Group’s profit to change. The carrying amount of the Group’s inventories at the reporting period is disclosed in Note 9 to the financial statements.
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