Annual Report 2023

105 ANNUAL REPORT 2023 2. MATERIAL ACCOUNTING POLICY INFORMATION (CONTINUED) 2.5 Property, plant and equipment (continued) When the Group makes payments for ownership interests of properties which includes both leasehold land and building elements, the entire consideration is allocated between the leasehold land and the building elements in proportion to the relative fair values at initial recognition. To the extent the allocation of the relevant payments can be made reliably, interest in leasehold land that is accounted for as an operating lease is presented as “right-of-use assets” in the consolidated statement of financial position except for those that are classified and accounted for as investment properties under the fair value model. When the consideration cannot be allocated reliably between non- lease building element and undivided interest in the underlying leasehold land, the entire properties are classified as property, plant and equipment. Leasehold land commences amortisation from the time when the land interest becomes available for its intended use. Amortisation on leasehold land and depreciation of other assets is calculated using the straight-line method to allocate cost to their residual values over their estimated useful lives, as follows: Leasehold land Shorter of remaining lease term of 50 years or useful life Buildings Shorter of the lease term or 30 years Harbour works, buildings and dockyard 8 to 50 years Plant and machinery 3 to 20 years Furniture and equipment 3 to 20 years Vessels and ships 10 to 25 years Motor vehicles 5 to 10 years Leasehold improvements Shorter of the lease term or 5 to 20 years The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of the reporting period. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount (note 2.8). Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised within “other income and other gains/(losses), net” in the consolidated statement of profit or loss. If an item of property, plant and equipment becomes an investment property because its use has changed as evidenced by end of owner-occupation, any difference between the carrying amount and the fair value of that item at the date of transfer is recognised in other comprehensive income and accumulated in equity. On the subsequent sale or retirement of the asset, the relevant revaluation reserve will be transferred directly to retained earnings.