Annual Report 2021

121 Notes to the Financial Statements Miramar Hotel and Investment Company, Limited Annual Report 2021 1 Significant accounting policies (Continued) (h) Investment property Investment properties are land and/or buildings which are owned or held under a leasehold interest (see note 1(j)) to earn rental income and/or for capital appreciation. These include land held for a currently undetermined future use and property that is being constructed or developed for future use as investment property. Investment properties are stated at fair value, unless they are still in the course of construction or development at the end of the reporting period and their fair value cannot be reliably measured at that time. Any gain or loss arising from a change in fair value or from the retirement or disposal of an investment property is recognised in profit or loss. Rental income from investment properties is accounted for as described in note 1(u)(i). (i) Other property, plant and equipment The following items of property, plant and equipment are stated at cost less accumulated depreciation and impairment losses (see note 1(k)): – right-of-use assets arising from leases over freehold or leasehold properties where the Group is not the registered owner of the property interest; and – hotel property; and – machinery, furniture, fixtures and equipment including right-of-use assets arising from leases of underlying plant and equipment (see note 1(j)). Freehold land is stated at cost less impairment losses (see note 1(k)). Gains or losses arising from the retirement or disposal of an item of property, plant and equipment are determined as the difference between the net disposal proceeds and the carrying amount of the item and are recognised in profit or loss on the date of retirement or disposal. Depreciation is calculated to write off the cost of items of property, plant and equipment, less their estimated residual value, if any, using the straight line method over their estimated useful lives as follows: – leasehold land and right-of-use assets are depreciated over the remaining term of the lease; – freehold land is not depreciated; – buildings including hotel property situated on leasehold land are depreciated over the unexpired term of the lease; and – machinery, furniture, fixtures and equipment 4–14 years Both the useful life of an asset and its residual value, if any, are reviewed annually.