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160 KUMPULAN WANG PERSARAAN (DIPERBADANKAN) FoR BEttER REtURNS

notes to the
financial statements
for the year ended 31 december 2022

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.11 Leases (continued)

(iii) Subsequent measurement

As lessee
the right-of-use asset is subsequently depreciated using the straight-line method from the commencement
date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term.
the estimated useful lives of right-of-use assets are determined on the same basis as those of property,
plant and equipment. in addition, the right-of-use asset is periodically reduced by impairment losses, if any,
and adjusted for certain remeasurements of the lease liability.

the lease liability is measured at amortised cost using the effective interest method. it is remeasured when
there is a change in future lease payments arising from a change in an index or rate, if there is a revision of
in-substance fixed lease payments, or if there is a change in the group’s estimate of the amount expected
to be payable under a residual value guarantee, or if the group changes its assessment of whether it will
exercise a purchase, extension or termination option.
When the lease liability is remeasured, a corresponding adjustment is made to the carrying amount of the
right-of-use asset or is recorded in profit or loss if the carrying amount of the right-of-use asset has been
reduced to zero.

As lessor
the group recognises lease payments received under operating leases as income on a straight-line basis
over the lease term as part of “gross investment income”.

2.12 Investment Properties
investment properties comprise land, completed properties and properties under construction (ipuc),
which are held for capital appreciation or rental purposes or both, and generally are not occupied for the use
or in the operations of the group. investment properties are classified as long-term investments with the initial
recognition at cost including transaction costs.

following the initial recognition, investment properties are measured at cost less accumulated depreciation
and accumulated impairment losses, if any, with the exception of freehold land with unlimited useful life and
ipuc, which are not depreciated. ipuc are not depreciated as they are not ready for their intended use.
other investment properties are depreciated over the estimated economic useful lives. the depreciation charged
for the leasehold land is based on the leasehold period on a straight-line method. the policy for the recognition
and measurement of impairment losses of non-financial assets are set out in note 2.18.
subsequent expenditure is capitalised to the asset’s carrying amount only when it is probable that the future
economic benefits associated with the expenditure will flow to the group and KWap and the cost of the item
can be reliably measured. all other repairs and maintenance costs are expensed when incurred. in the event of
a replacement, if any, the carrying amount of the replaced part is derecognised.