Page 46 - Nanyang Technological University

NOTES TO
FINANCIAL STATEMENTS (CONT’D)

31 March 2015

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)

2.6 Property, plant and equipment (cont’d)

Depreciation

Depreciation is based on the cost of an asset less its residual value. Significant components of individual
assets are assessed and if a component has a useful life that is different from the remainder of that asset,
that component is depreciated separately.

Depreciation is recognised in the profit or loss on a straight-line basis over the estimated useful lives of
each component of an item of property, plant and equipment.

Except for freehold land and buildings under construction which are not depreciated, depreciation on other
property, plant and equipment is recognised in the statement of comprehensive income on a straight-line
basis over the estimated useful lives (or lease term, if shorter) of each part of an item of property, plant and
equipment.

The estimated useful lives are as follows:

Buildings and infrastructure 3 to 30 years
5 years
Renovation 6 years
3 to 5 years
Machinery, laboratory and workshop equipment 8 years
8 years
Furniture and office equipment

Transportation equipment

Others

Depreciation methods, useful lives and residual values are reviewed and adjusted as appropriate, at each
reporting date.

Buildings under construction are stated at cost. Expenditure relating to the construction of projects are
capitalised when incurred. No depreciation is charged on building under construction until the building
under construction is completed and the related property, plant and equipment are transferred to the
respective property, plant and equipment categories and depreciated accordingly.

Assets held under finance leases are depreciated over their expected useful lives on the same basis as
owned assets or, if there is no certainty that the lessee will obtain ownership by the end of the lease term,
the assets shall be fully depreciated over the shorter of the lease term and their useful lives.

44 NTU ANNUAL REPORT 2015