LensCrafters 2015 Annual Report Download - page 100

Notes to the consolidated financial statement as of December 31, 2015 Page 6 di 68
the net realizable value at the end of each reporting period, it considers whether the circumstances that previously caused
inventories to be written down no longer exist or whether there is clear evidence of an increase in net realizable value because of
changed economic circumstances and, if necessary, reverses the amount of the write-down so that the new carrying amount is
the lower of the cost and the revised net realizable value.
Property, plant and equipment
Property, plant and equipment are measured at historical cost. Historical cost includes expenditures that are directly attributable
to the acquisition of the items. After initial recognition, property, plant and equipment is carried at cost less accumulated
depreciation and any accumulated impairment loss. The depreciable amount of the items of property, plant and equipment,
measured as the difference between their cost and their residual value, is allocated on a straight-line basis over their estimated
useful lives as follows:
Category Useful life
Buildings
From 10 to 40
years
Machinery and equipment From 3 to 20 years
Aircraft 20 years
Other equipment
From 2 to 10
years
Leasehold Improvements The lower of useful life and the residual duration of the lease contract
Depreciation ceases when property, plant and equipment is classified as held for sale, in compliance with
IFRS 5—Non-Current Assets Held for Sale and Discontinued Operations.
Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is
probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured
reliably. The carrying amount of the replaced part is derecognized. Repair and maintenance costs are charged to the
consolidated statement of income during the financial period in which they are incurred.
Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying item of property,
plant and equipment are capitalized as part of the cost of that asset.
The net carrying amount of the qualifying items of property, plant and equipment is assessed, in the case of impairment
indicators, at each balance sheet date. The Group would record a writedown of the net carrying amount if it is lower than the
recoverable amount. Assets’ useful lives are assessed at each balance sheet date.
Upon disposal or when no future economic benefits are expected from the use of an item of property, plant and equipment, its
carrying amount is derecognized. The gain or loss arising from derecognition is included in profit and loss.
Finance and operating leases
Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating
leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to the consolidated
statement of income on a straight-line basis over the lease term.
Leases where lessees bear substantially all the risks and rewards of ownership are classified as finance leases. Finance leases
are capitalized at the lease’s commencement at the lower of the fair value of the leased property and the present value of the
minimum lease payments.