Page 47 - Nanyang Technological University

NOTES TO FINANCIAL STATEMENTS
(cont’d)
31 March 2016

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)

2.6 Property, plant and equipment

Recognition and measurement

Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses except
for land alienated to the Group and University Company which are stated at values provided by the Government.
Donated assets are stated at valuation at initial recognition.

The freehold land of the Group and the University Company were stated at valuation carried out in December
1987 based on values in a valuation report from the Commissioner of Lands. The revaluation was done on a one-
off basis and accordingly, the transitional provision in FRS 16 - Property, Plant and Equipment was adopted
to continue with its existing policy of stating the freehold land at deemed cost. This revaluation surplus was
credited directly to the Capital Account. Upon disposal, any related revaluation surplus is transferred from the
Capital Account to accumulated surplus and is not taken into account in arriving at the gain or loss on disposal.

Cost includes expenditures that are directly attributable to the acquisition of the asset. The cost of self-constructed
assets includes the cost of materials and direct labour, any other costs directly attributable to bringing the asset
to a working condition for its intended use, and the costs of dismantling and removing the items and restoring the
site on which they are located. Purchased software that is integral to the functionality of the related equipment
is capitalised as part of that equipment.

When parts of an item of property, plant and equipment have different useful lives, they are accounted for as
separate items (major components) of property, plant and equipment.

Property, plant and equipment costing less than $2,000 each, renovation costing $100,000 and below and library
books are generally charged to profit or loss in the year of purchase.

The gain or loss on disposal of an item of property, plant and equipment recognised in profit or loss is derived
from the proceeds from disposal and the carrying amount of property, plant and equipment.

Subsequent cost

The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of
the item if it is probable that the future economic benefits embodied within the part will flow to the Group and
its cost can be measured reliably. The costs of the day-to-day servicing of property, plant and equipment are
recognised in the profit or loss as incurred.

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