Notes To The Financial Statements (Continued) For The Year Ended 30 June 2014 2.5 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) c) Plant and Equipment Plant and equipment is stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. The cost of assets is the cost of acquiring and installing a new modern substitute asset having the same productive capacity as that of existing, depreciated according to age, obsolescence, use and condition. This value is only applied to assets which are part of an operating concern, and assumes adequate profitability. It does not necessarily represent the open market value of the assets. Provision is made for the depreciation of plant and equipment on a straight line basis to write down assets to estimated residual values over their expected useful lives as follows: Depreciation is calculated on a straight line basis at rates calculated to write off the cost of these assets over their estimated useful lives which are as follows: Furniture and fittings Office equipment Computers Motor vehicles - 10 years - 10 years - 10 years - 5 years Plant and equipment is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of asset (calculated as the difference between the net proceeds and the carrying value of the asset) is included in the income statement, in the year the asset is derecognized. d) Impairment of non-financial assets The organisation assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication exists, the organisation estimates the recoverable amount of the asset. If there is any such indication that an asset may be impaired, the recoverable amount is estimated for the individual asset. If it is not possible to estimate the recoverable amount of the individual asset, the recoverable amount of the cash-generating unit to which the asset belongs is determined. The recoverable amount of an asset is the higher of its fair value less costs to sell and value in use. If the recoverable amount of an asset is less than the carrying amount, the asset is reduced to its recoverable amount. That reduction is an impairment loss. This is recognised through the statement of comprehensive income. The increased carrying amount of an asset attributable to a reversal of an impairment loss does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior years. For assets excluding goodwill, an assessment is made at each reporting date to determine whether there is an indication that previously recognised impairment losses no longer exist or have decreased. If such indication exists, the organisation estimates the asset’s or CGU’s recoverable amount. A previously recognised impairment loss is reversed only if there has been a change in the assumptions used to determine the asset’s recoverable amount since the last impairment loss was recognised. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in the statement of profit or loss unless the asset is carried at a revalued amount, in which case, the reversal is treated as a revaluation increase. 45