ANNUAL REPORT 2025 147 NOTES TO THE FINANCIAL STATEMENTS 2 Basis of preparation and material accounting policy information (Continued) (e) Fixed assets Fixed assets are stated at cost less depreciation and any impairment loss. Properties comprise buildings and civil works. Buildings and civil works are depreciated on the basis of an expected life of 50 years, or the remainder thereof, or over the remaining period of the lease of the underlying leasehold land and land use rights, whichever is lesser. The period of the lease includes the period for which a right of renewal is attached. Other assets comprise motor vehicles, computer equipment and other fi xed assets. Depreciation of fi xed assets other than properties is provided at rates calculated to write off their costs to their residual values over their estimated useful lives on a straight line basis as follows: Container handling equipment 10 - 30 years Barges 15 years Motor vehicles 5 years Computer equipment 5 years Other fi xed assets 5 - 25 years The gain or loss on disposal or retirement of a fi xed asset is the diff erence between the net sales proceeds and the carrying amount of the relevant asset, and is recognised in the income statement. (f) Projects under development Projects under development are carried at cost and include project development expenditure and capitalised interest on related loans incurred up to the date of completion. On completion, projects under development are transferred to fi xed assets. (g) Leasehold land and land use rights The acquisition costs and upfront payments made for leasehold land and land use rights are presented on the statement of fi nancial position as leasehold land and land use rights. The prepaid lease payments are right-of-use assets. The balances are expensed in the income statement on a straight-line basis over the period of the lease/ rights. (h) Customer relationships Customer relationships, which are acquired in a business combination, are recognised at fair value at the acquisition date. Customer relationships are carried at cost less accumulated amortisation. Amortisation is calculated using the straight-line method over the expected life of the customer relationships, ranging from approximately 23 to 33 years. (i) Goodwill Goodwill is initially measured at cost being excess of the aggregate of the consideration transferred, the amount recognised for non-controlling interests and any fair value of the Group’s previously held equity interests in the acquiree over the fair value of the net identifi able assets acquired and liabilities assumed. Goodwill on acquisition of a foreign operation is treated as an asset of the foreign operation. Goodwill is subject to impairment test annually and when there are indications that the carrying value may not be recoverable. If the cost of acquisition is less than the fair value of the Group’s share of the net identifi able assets of the acquired company, the diff erence is recognised directly in the income statement. For the purpose of impairment testing of goodwill, goodwill is allocated to each of the Group’s cash-generating units (“CGU”) expected to benefi t from synergies arising from the business combination. An impairment loss is recognised when the carrying amount of a CGU, including the goodwill, exceeds the recoverable amount of the CGU. The recoverable amount of a CGU is the higher of the CGU’s fair value less cost to sell and value-in-use.
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