| (g) | Property, plant and equipment |
Property, plant and equipment are initially recorded at cost, less subsequent accumulated depreciation and impairment losses (Note 2(n)). The cost of an asset comprises its purchase price, any directly attributable costs of bringing the asset to working condition and location for its intended use and the cost of borrowed funds used during the periods of construction. Expenditure incurred after the asset has been put into operation, including cost of replacing part of such an item, is capitalized only when it increases the future economic benefits embodied in the item of property, plant and equipment and the cost can be measured reliably. All other expenditure is expensed as it is incurred.
Assets held under finance leases (Note 2 (m)) are amortized over the shorter of the lease term and their estimated useful lives on a straight-line basis. As of December 31, 2017, no asset was held by the Group under finance leases (2016: nil).
Gains or losses arising from retirement or disposal of property, plant and equipment are determined as the difference between the net disposal proceeds and the carrying amount of the respective asset and are recognized as income or expense in the profit or loss on the date of disposal.
Depreciation is provided to write off the cost of each asset over its estimated useful life on a straight-line basis, after taking into account its estimated residual value, as follows:
| Depreciable lives primarily range from |
||
|
Buildings and improvements |
8 to 30 years | |
|
Telecommunications network plant and equipment |
5 to 10 years | |
|
Furniture, fixture, motor vehicles and other equipment |
5 to 10 years |
Where parts of an item of property, plant and equipment have different useful lives, the cost of the item is allocated on a reasonable basis between the parts and each part is depreciated separately. Both the useful life of an asset and its residual value are reviewed annually.
During the year, the Group reviewed the estimated useful lives of all property, plant and equipment and changed the depreciable lives of corporate information system equipment ,IPTV equipment and CDN equipment (included in telecommunications network plant and equipment) from 10 years to 5 years. The effect of such changes in accounting estimates is set out in Note 8.