Page 163 - KWAP_AR2022

FoR BetteR RetuRns Annual Report 2022 161

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

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.12 Investment Properties (continued)

the residual value, useful life and depreciation method of investment properties are reviewed at the end of each
financial year, and adjusted prospectively, when appropriate.

investment properties are derecognised upon disposal or permanent withdrawal from use whereby no future
economic benefit is expected from the disposal or retirement. gains or losses on the disposal or retirement of
investment properties are recognised in profit or loss in the year of disposal or retirement, if any.

transfers are made to or from investment properties when, and only when, there is a change in use. in terms of
a transfer from an investment property to owner-occupied property, the deemed cost for subsequent accounting
purposes is the fair value at the date of change in use. for a transfer from an owner-occupied property to
investment property, the property is subsequently accounted for in accordance with the accounting policy for
property and equipment set out in note 2.6 up to the date of change in use.
freehold land with unlimited useful life and land held for property development are not depreciated and
recognised at cost less impairment losses, if any.
land held for property development consists of land whereby no development activities have been carried out
or where development activities are not expected to be completed within the normal operating cycle. such land
is classified as non-current assets and is recognised at costs.

depreciation of investment property is provided for on a straight-line basis where the cost of each asset is written
off to its residual value based on the following rates:

buildings 2.50%
leasehold land (based on leasehold period) 1.01%

2.13 Provisions

provisions are recognised upon the presence of an obligation (legal or constructive) resulting from past events
where the outflow of economic resources to settle the obligation is probable and the amount of the obligation is
reliably measured.

in the event of an expected reimbursement of provision to the group and KWap, the reimbursement is recognised
as a separate asset but only when the reimbursement is virtually certain. provisions are not recognised for future
operating losses.

for a number of similar obligations, the likelihood that an outflow will be required for settlement is determined by
considering the class of obligations as a whole. a provision is recognised even if the likelihood of an outflow with
respect to any one item included in the same class of obligations may be small.