Singapore Airlines 2010 Annual Report Download - page 102

SINGAPORE AIRLINES
100
notes to the financial statements
31 march 2010
2 Summary of Significant Accounting Policies (continued)
(h) Depreciation of property, plant and equipment
Property, plant and equipment are depreciated on a straight-line basis at rates which are calculated to write-down
their cost to their estimated residual values at the end of their operational lives. Operational lives, residual values and
depreciation method are reviewed annually in the light of experience and changing circumstances, and adjusted as
appropriate at the end of each reporting period.
Freehold land, advance and progress payments are not depreciated.
Fully depreciated assets are retained in the financial statements until they are no longer in use. No depreciation is
charged after assets are depreciated to their residual values.
(i) Aircraft, spares and spare engines
The Group depreciates its new passenger aircraft, spares and spare engines over 15 years to 10% residual
values. For used passenger aircraft, the Group depreciates them over the remaining life (15 years less age of
aircraft) to 10% residual values.
The Group depreciates its new freighter aircraft over 15 years to 20% residual values. For used freighter aircraft,
the Group depreciates them over the remaining life (15 years less age of aircraft) to 20% residual value.
Major inspection costs relating to landing gear overhauls, heavy maintenance visits and engine overhauls
(including inspection costs provided under power-by-hour maintenance agreements) are capitalised and
depreciated over the average expected life between major overhauls, estimated to be 4 to 10 years.
Flight simulators and training aircraft are depreciated over 10 years to nil residual values, and 5 years to 20%
residual values respectively.
(ii) Land and buildings
Freehold buildings, leasehold land and buildings are depreciated to nil residual values as follows:
Company owned office premises – according to lease period or 30 years, whichever is the shorter.
Company owned household premises – according to lease period or 10 years, whichever is the shorter.
Other premises – according to lease period or 5 years, whichever is the shorter.
(iii) Others
Plant and equipment, office and computer equipment are depreciated over 1 to 12 years to nil residual values.
(i) Investment properties
Investment properties are initially recorded at cost. Subsequent to recognition, investment properties are stated at
cost less accumulated depreciation and accumulated impairment losses, if any.
Depreciation is provided on a straight-line basis so as to write off the cost of the leasehold investment properties over
its estimated useful lives according to the lease period or 30 years whichever is shorter.