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EN_Tipco_Annual Report 2014

TIPCO FOODS PUBLIC COMPANY LIMITED Investments in associated company in the Consolidated financial statements are accounted for by the equity method. (See Note to the Financial Statements No.12) Investments in subsidiaries and associated companies in the Separate financial statements are accounted for by the cost method less allowance for decline in value of investments. (See Note to the Financial Statements No.12) 3.6. Lease Agreements Financial Leases The leases of assets, which the substantially all the risks and rewards associated with the ownership of the assets have been transferred to the lessee, title may or may not eventually be transferred to the lessee under the finance lease arrangements, are classified as finance leases. The lessee is to record the finance lease as an asset and obligation at an amount equal to the fair value of the leased asset or the present value of the minimum lease payment whichever is lower. The interest expense is charged to the profit or loss over the lease period. The leased asset is depreciated over the useful life of the asset. Operating Leases The leases of assets, which the substantially all the risks and rewards associated with the ownership of the assets have not been transferred to the lessee, are classified as operating leases. The payments made under operating leases are charged to the profit or loss on a straight-line method over the period of the lease. 3.7. Investment Property Investment properties are properties which are held to earn rental income, for capital appreciation or for both, but not for sale in the ordinary course of business, use in the production or supply of goods or services or for administrative purposes. Investment properties are stated at cost. 3.8. Property, Plant and Equipment Property is stated at cost. Plant and equipment are stated at cost less accumulated depreciation and allowance for loss on impairment of assets. Depreciation is calculated by straight-line method based on the estimated useful lives of the assets and in accordance with the estimated production capacity of machinery as the following : Land development 10 Years Building and complement 10-25 Years Machinery and equipment Straight-line method 10-20 Years - Estimated production capacity 919.04 million bottles Tools and equipment 5-20 Years Furniture and office equipment 3-10 Years Vehicles 5-10 Years PAGE 116/ 117


EN_Tipco_Annual Report 2014
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