|
17. |
INVESTMENT PROPERTIES |
The net book value of investment properties as of December 31, 2016 and 2015 was as follow:
|
|
|
Land not being used for operation |
|
|
Office buildings for rent |
|
|
Total |
|
|||
|
|
|
US$’000 |
|
|
US$’000 |
|
|
US$’000 |
|
|||
|
As of December 31, 2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost |
|
|
429 |
|
|
|
712 |
|
|
|
1,141 |
|
|
Less: Accumulated depreciation |
|
|
— |
|
|
|
(378 |
) |
|
|
(378 |
) |
|
Net book value |
|
|
429 |
|
|
|
334 |
|
|
|
763 |
|
|
|
|
Land not being used for operation |
|
|
Office buildings for rent |
|
|
Total |
|
|||
|
|
|
US$’000 |
|
|
US$’000 |
|
|
US$’000 |
|
|||
|
As of December 31, 2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost |
|
|
309 |
|
|
|
659 |
|
|
|
968 |
|
|
Less: Accumulated depreciation |
|
|
— |
|
|
|
(315 |
) |
|
|
(315 |
) |
|
Net book value |
|
|
309 |
|
|
|
344 |
|
|
|
653 |
|
A reconciliation of the net book value of investment properties was as follow:
|
|
|
2017 |
|
|
2016 |
|
||
|
|
|
US$’000 |
|
|
US$’000 |
|
||
|
Net book value at January 1 |
|
|
653 |
|
|
|
667 |
|
|
Depreciation (included in administrative expenses) |
|
|
(35 |
) |
|
|
(24 |
) |
|
Addition |
|
|
84 |
|
|
|
— |
|
|
Disposals |
|
|
— |
|
|
|
(229 |
) |
|
Transfer from property plant and equipment |
|
|
— |
|
|
|
240 |
|
|
Exchange difference |
|
|
61 |
|
|
|
(1 |
) |
|
Net book value at December 31 |
|
|
763 |
|
|
|
653 |
|
Investment properties are carried at historical cost less accumulated depreciation and impairment. Land is not depreciated and office buildings are depreciated on a straight-line basis over the estimated useful lives of 20 years.
On May 31, 2016, the Board of Directors of Charoong Thai approved the sale of land not being used for operating for a consideration of $4,695 (Baht 165 million). The sale of the land resulted in a gain of $4,466 (Baht 157 million) which was recognized in other operating income of the Company’s 2016 consolidated financial statements.
|
17. |
INVESTMENT PROPERTIES (continued) |
The amount recognized in profit arising from the investment properties for the years ended December 31, 2017, 2016 and 2015 was as follow:
|
|
|
2017 |
|
|
2016 |
|
|
2015 |
|
|||
|
|
|
US$’000 |
|
|
US$’000 |
|
|
US$’000 |
|
|||
|
Rental income derived from investment properties |
|
|
68 |
|
|
|
36 |
|
|
|
16 |
|
|
Direct operating expenses (including repairs and maintenance) generating rental income |
|
|
(1 |
) |
|
|
(1 |
) |
|
|
(1 |
) |
|
Direct operating expenses (including repairs and maintenance) that did not generate rental income |
|
|
(1 |
) |
|
|
(1 |
) |
|
|
(1 |
) |
|
Net profit arising from investment properties carried at cost |
|
|
66 |
|
|
|
34 |
|
|
|
14 |
|
The fair value of the investment properties are stated below:
|
|
|
As of December 31, |
|
|||||
|
|
|
2017 |
|
|
2016 |
|
||
|
|
|
US$’000 |
|
|
US$’000 |
|
||
|
Land not being used for operation |
|
|
9,548 |
|
|
|
8,851 |
|
|
Office building for rent |
|
|
1,303 |
|
|
|
924 |
|
The fair value of aforementioned investment properties have been determined based on the valuation and is considered a level 3 measurement. The valuation has been made on the assumption to sell the property interests in the open market in the neighborhood without the benefit of any deferred term contract, leaseback, joint venture, management agreement or any similar arrangement, which would serve to increase the value of the property interests. The valuation adopted market comparison approach to estimate the fair market value of the properties. Under the market comparison approach, the appraisal is based on recent sales and listings of comparable property. Adjustments were made for differences between the subject property and those actual sales and listings regarded as comparable. The factors which used for considering the property valuation include the significant unobservable inputs, such as location, transportation, land uses, facilities, neighboring area, land characteristics, potential, regulations and liquidity.