NOTES TO THE FINANCIAL STATEMENTS Year ended 31 December 2024 3 MATERIAL ACCOUNTING POLICY INFORMATION (CONT’D) 3.3 Property, plant and equipment (cont’d) (iii) Depreciation (cont’d) Depreciation is recognised as an expense in profit or loss on a straight-line basis over the estimated useful lives of each component of an item of property, plant and equipment. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the Group will obtain ownership by the end of the lease term. No depreciation is provided on freehold or 999-year leasehold land. For freehold and leasehold properties under development and renovation-in-progress, no depreciation is provided until these items have been completed. The estimated useful lives for the current and comparative years are as follows: Freehold buildings and leasehold land and buildings • Core component of hotel buildings – 50 years, or lease term if shorter • Surface, finishes and services of hotel buildings – 30 years, or lease term if shorter • Leasehold land – Lease term Furniture, fittings, plant and equipment and improvements – 3 to 20 years Residual values ascribed to the core component of hotel buildings depend on the nature, location and tenure of each hotel property. No residual values are ascribed to surface, finishes and services of hotel buildings and right-of-use assets in respect of leases where the Group is a lessee. Depreciation methods, useful lives and residual values are reviewed, and adjusted as appropriate, at each reporting date. 3.4 Investment properties (i) Recognition and measurement Investment properties are stated at cost less accumulated depreciation and accumulated impairment losses. Any gain and loss on disposal of investment properties (calculated as the difference between the net proceeds from disposal and the carrying amounts of the investment properties) are recognised in profit or loss. (ii) Depreciation Depreciation is recognised as an expense in profit or loss on a straight-line basis over the estimated useful lives of each component of an investment property. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the Group will obtain ownership by the end of the lease term. No depreciation is provided on freehold or 999-year leasehold land included in the investment properties. The estimated useful lives for the current and comparative years are as follows: Freehold and leasehold properties – 50 years, or lease term if shorter Leasehold land – Lease term ranging from 50 to 96 years Furniture, fittings, plant and equipment and improvements – 3 to 20 years Depreciation methods and useful lives are reviewed, and adjusted as appropriate, at each reporting date. ANNUAL REPORT 2024 FINANCIALS 107
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