Depreciation is provided on freehold land and buildings at a rate designed to write off the cost of the asset over its expected useful life. The cost of freehold land and buildings to be written off, is the cost of the asset less the estimated residual value of the asset at the end of its useful economic life. The company carries out a policy of regular maintenance on the land and buildings and, in the opinion of the Directors, the estimate residual value at the end of its useful life will not be less than cost.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset and is credited or charged to the profit and loss.
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.