127 Annual Report 2024 2. Summary of significant accounting policies (cont’d) 2.10 Property, plant and equipment All items of property, plant and equipment are initially recorded at cost. Subsequent to recognition, property, plant and equipment, other than freehold land, are measured at cost less accumulated depreciation and any accumulated impairment losses. Freehold land has an unlimited useful life and therefore is not depreciated. Depreciation is computed on a straightline basis over the estimated useful lives of the assets as follows: Buildings – 5 to 39 years Leasehold improvements – 2 to 20 years Plant and machinery – 4 to 5 years Tools and equipment – 5 years Office furniture and fittings – 5 years Computer equipment – 2 to 5 years Motor vehicles – 3 to 8 years Assets under construction included in plant and equipment are not depreciated as these assets are not yet available for use. The residual value, useful life and depreciation method are reviewed at each financial year-end, and adjusted prospectively, if appropriate. 2.11 Intangible assets Intangible assets acquired separately are measured initially at cost. Following initial acquisition, intangible assets are carried at cost less any accumulated amortisation and any accumulated impairment losses. Internally generated intangible assets, excluding capitalised development costs, are not capitalised and expenditure is reflected in profit or loss in the year in which the expenditure is incurred. The useful lives of intangible assets are assessed as either finite or indefinite. Intangible assets with finite useful lives are amortised over the estimated useful lives and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method are reviewed at least at each financial year-end. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are accounted for by changing the amortisation period or method, as appropriate, and are treated as changes in accounting estimates. Intangible assets with indefinite useful lives or not yet available for use are tested for impairment annually, or more frequently if the events and circumstances indicate that the carrying value may be impaired either individually or at the cash-generating unit level. Such intangible assets are not amortised. The useful life of an intangible asset with an indefinite useful life is reviewed annually to determine whether the useful life assessment continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis. Sales order backlog Significant confirmed orders and pipeline projects which are acquired in a business combination and amortised over 1 to 4 years. Non-compete agreement Non-compete agreement acquired in a business combination are identified and recognised separately from goodwill. The cost of such intangible assets is fair value at the acquisition date. The useful life of the non-compete agreements is 10 years as that is the duration imposed on the former owner of the business acquired to generate cash flows for the Group. The non-compete agreement are amortised on a straight-line basis over their useful lives of 10 years. NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 December 2024
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