Notes to the Consolidated Financial Statements
For the year ended 31 December 2010
16.Property, plant and equipment (continued)
At 31 December 2010, leasehold land with carrying amounts of HK$1,642,109,000 (2009: HK$1,686,714,000) and HK$18,747,000 (2009: HK$19,699,000) were situated in Hong Kong under medium-term and long-term leases which are finance lease in nature, respectively. Freehold land was situated outside Hong Kong.
Owner occupied land and buildings situated in Hong Kong are held under long-term leases which are finance lease in nature. During the year ended 31 December 2010, a carrying value of HK$41,691,000 was transferred to investment properties due to change in use from owner occupation to earning rental from outsiders. At the date of change in use, the fair value of the property was HK$64,800,000, the excess of fair value over the carrying value of the property at that date of HK$23,109,000 was recognised in property revaluation reserve. In addition, investment properties with carrying value of HK$91,000,000 were transferred to property, plant and equipment due to change in use from earning rental from outsiders to owner occupation.
At 31 December 2009 and 2010, the Directors conducted an impairment assessment on hotel properties, no reversal or additional impairment loss was recognised for the year ended 31 December 2010. The recoverable amounts of the hotel properties located in the USA at 31 December 2009 were determined less than their carrying amounts. The review led to the recognition of an impairment loss of HK$490,908,000 in the consolidated income statement for the year ended 31 December 2009. The recoverable amount of the hotel properties (comprising freehold land and hotel buildings) at 31 December 2009 were determined by value in use which were estimated using the future cash flows expected to arise and suitable discount rates ranging from 10.5% to 11% in order to calculate the present values.
FAIR VALUE At 1 January Exchange adjustments Additions Transfer from property, plant and equipment Transfer to property, plant and equipment Increase in fair value recognised in the consolidated income statement Disposals
3,651,711 2,205 4,670 64,800 (91,000) 571,775 (11,864)
3,571,890 653 6,601 – – 85,482 (12,915)
At 31 December
Great Eagle Holdings Limited