2. MATERIAL ACCOUNTING POLICY INFORMATION (CONT’D.) 2.19 Investments in joint ventures The Group’s investments in joint ventures are accounted for using the equity method. Under the equity method, the investment in a joint venture is initially recognised at cost. The carrying amount of the investment is adjusted to recognise changes in the Group’s share of net assets of the joint venture since the acquisition date. Unrealised gains and losses resulting from transactions between the Group and the joint ventures are eliminated to the extent of the interest in the joint ventures. The Group recognises the excess of the unrealised profit over the carrying amount of the associate as deferred income. In the Company’s separate financial statements, investments in joint ventures are accounted for at cost less impairment losses. 2.20 Leases (a) As lessee (i) Right-of-use assets Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of the assets as follows: - Leasehold land: leasehold period between 92 years to 875 years - Premises: 2 years to 30 years - Motor vehicles: 5 years - Plant and machineries: 7 years (ii) Lease liabilities In calculating the present value of lease payments, the Group and the Company use their incremental borrowing rate at the lease commencement date because the interest rate implicit in the lease is not readily determinable. (iii) Short-term leases and leases of low-value assets The Group and the Company apply the short-term lease recognition exemption to its short-term leases of equipment (i.e., those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of low-value assets recognition exemption to leases of office equipment that are considered to be low value. Lease payments on shortterm leases and leases of low-value assets are recognised as expense on a straight-line basis over the lease term. NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2025 AR 2025 | FINANCIAL STATEMENT & OTHER INFORMATION 268
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