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In the event that lease incentives are received to enter into operating leases, such
incentives are recognised as a liability. The aggregate benefit of incentives is recognised
as a reduction of rental expense on a straight-line basis, except where another systematic
basis is more representative of the time pattern in which economic benefits from the
leased asset are consumed.
e.
PLANT AND EQUIPMENT - These are stated at cost less accumulated depreciation and any
accumulated impairment losses.
Depreciation is charged so as to write off the cost of plant and equipment, over their
estimated useful lives, using the straight-line method, on the following bases:
Furniture, fixtures and equipment - 8 years
Office equipment - 5 to 10 years
Computer equipment - 3 to 5 years
The estimated useful lives, residual values and depreciation method of plant and
equipment are reviewed at the end of each reporting period with the effect of any
changes in estimates accounted for on a prospective basis. Development work-in-
progress is not depreciated.
The gain or loss arising on disposal or retirement of an item of plant and equipment is
determined as the difference between the sales proceeds and the carrying amounts of the
asset and it is recognised in income or expenditure.
f.
INTANGIBLE ASSETS - The acquired computer software licenses are initially capitalised
at cost which includes the purchase price (net of any discounts and rebates) and other
directly attributable cost of preparing the asset for its intended use. Costs associated with
maintaining the computer software are recognised as an expense when incurred.
Computer software is subsequently carried at cost less accumulated amortisation and
accumulated impairment losses.
Amortisation is calculated based on the cost of the asset, less its residual value.
Amortisation is recognised in income and expenditure on a straight-line basis over the
estimated useful lives of intangible assets from the date that they are available for use.
The estimated useful lives for the current and comparative periods are from 3 to 5 years.
Amortisation methods, useful lives and residual values are reviewed at the end of each
reporting period and adjusted if appropriate.
g.
IMPAIRMENT OF NON-FINANCIAL ASSETS - At the end of each reporting period, the
Commission reviews the carrying amounts of its assets to determine whether there is any
indication that those assets have suffered an impairment loss. If any such indication exists,
the recoverable amount of the asset is estimated in order to determine the extent of the
impairment loss (if any). Where it is not possible to estimate the recoverable amount of an
individual asset, the Commission estimates the recoverable amount of the cash-generating
unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In
assessing value in use, the estimated future cash flows are discounted to their present
value using a pretax discount rate that reflects current market assessments of the time
value of money and the risks specific to the asset.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less
than its carrying amount, the carrying amount of the asset (cash-generating unit) is
reduced to its recoverable amount. An impairment loss is recognised immediately in
income or expenditure.
Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-
generating unit) is increased to the revised estimate of its recoverable amount, but so that
the increased carrying amount does not exceed the carrying amount that would have been
determined had no impairment loss been recognised for the asset (cash-generating unit)
in prior years. A reversal of an impairment loss is recognised immediately in profit or loss.
h.
PROVISIONS - Provisions are recognised when the Commission has a present obligation (legal
or constructive) as a result of a past event, it is probable that the Commission will be required
to settle the obligation, and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required
to settle the present obligation at the end of the reporting period, taking into account the
NOTES TO FINANCIAL STATEMENTS
31 March 2017
COMPETITION COMMISSION OF SINGAPORE
68