The American Club 2022/2023 Annual Report

PAGE 65

NOTES TO FINANCIAL STATEMENTS 30 JUNE 2023

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)

Derivatives are initially recognised at fair value at the date of a derivative contract is entered into and are subsequently remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognised in other comprehensive income immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in other comprehensive income depends on the nature of the hedge relationship. Hedge accounting is not applied by the Club. A derivative is presented as a non-current asset or a non-current liability if the remaining maturity of the instrument is more than 12 months and it is not expected to be realised or settled within 12 months. Other derivatives are presented as current assets or current liabilities. Consumable Stocks - Consumable stocks are stated at the lower of cost and net realisable value. Cost comprises cost of purchase and other costs incurred in bringing the consumable stocks to their present location and condition. Cost is calculated using the weighted average method. Net realisable value represents the estimated selling price less all estimated costs to be incurred in marketing, selling and distribution. Allowance is made for obsolete and slow-moving items.

Property, Plant and Equipment - Property, plant and equipment are stated at cost less accumulated depreciation and any accumulated impairment losses.

Construction-in-progress consists of upgrading work on buildings. Construction-in-progress is not depreciated.

Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of materials and direct labour, any other costs directly attributable to bringing the asset to a working condition for its intended use, and the cost of dismantling and removing the items and restoring the site on which they are located. Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment.

Depreciation is charged so as to write off the cost of assets except for construction-in-progress, over their estimated useful lives, using the straight-line method, on the following basis:

Buildings, improvements and additions Plant, machinery and equipment

10 to 20 years

5 years 5 years 3 years 3 years

Furniture, fittings and fixtures

Outdoor furniture, fittings and fixtures

China, glass and silverware

Freehold land has an unlimited useful life and therefore is not depreciated.

The estimated useful lives, residual values and depreciation method are reviewed at each year end, with the effect of any changes in estimate accounted for on a prospective basis.

The gain or loss arising on disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amounts of the asset and is recognised in profit or loss.

Fully depreciated assets still in use are retained in the financial statements.

THE AMERICAN CLUB SINGAPORE ANNUAL REPORT 2022 / 2023