LOQUS HOLDINGS P.L.C.
Annual Financial Statements for the year ended 30 June 2022
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NOTES TO THE FINANCIAL STATEMENTS – continued2.4SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – continued
Property, plant and equipment
The Group’s property, plant and equipment are classified into the following classes – equipment furniture and fittings, motor vehicles, factory improvements.
Items of property, plant and equipment are measured at cost less accumulated depreciation and impairment losses if any. Subsequent costs are included the asset’s carrying amount when it is probable that future economic benefits associated with the item will flow to the Group/Company and the cost of the item can be measured reliably. Expenditure on repairs and maintenance of property, plant and equipment is recognised as an expense when incurred.
Cost includes expenditures that are directly attributable to the acquisition of the asset. When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the statement of comprehensive income in the year the asset is derecognised.
The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Group and its cost can be measured reliably. The costs of the day-to-day servicing of property, plant and equipment are recognised in the statement of comprehensive income as incurred.
Depreciation is calculated on a straight line basis over the useful life of each part of an item of property, plant and equipment. Depreciation commences when the depreciable assets are available for use and is charged to profit or loss, so as to write off the cost less any estimated residual value, over their estimated useful lives.
The estimated lives for the current and comparative periods are as follows:
•Furniture, fittings and equipment4 - 10 years
•Motor vehiclesover the remaining period of the lease
•Factory improvementsover the remaining period of the lease
The assets’ residual values, useful lives and methods of depreciation are reviewed, and adjusted if appropriate, at each reporting date.
Leased assets
Group as a lessee
IFRS 16 requires the Group to assess whether a contract is, or contains a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for a consideration. Leases are recognised as a right-of-use asset and a corresponding liability at the commencement date, being the date at which the leased asset is available for use by the Group.