Page 61 - JTC-Annual Report-2025-Eng

JTC Logistics Transportation & Stevedoring Company K.S.C.P
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2025
(All amounts are in Kuwaiti Dinars)

f) Property and equipment
The initial cost of property and equipment comprises its purchase price and any directly
attributable costs of bringing the asset to its working condition and location for its intended
use. Expenditures incurred after the property and equipment have been put into operation,
such as repairs and maintenance and overhaul costs, are normally charged to consolidated
statement of profit or loss in the year in which the costs are incurred. In situations where it
can be clearly demonstrated that the expenditures have resulted in an increase in the future
economic benefits expected to be obtained from the use of an item of property and equipment
beyond its originally assessed standard of performance, the expenditures are capitalized as
an additional cost of property and equipment. Expenditure incurred to replace a component
of an item of property and equipment that is accounted for separately is capitalized and the
carrying amount of the component that is replaced is written off.
Property and equipment are stated at cost less accumulated depreciation and impairment
losses. When assets are sold or retired, their cost and accumulated depreciation are eliminated
from the accounts and any gain or loss resulting from their disposal is included in consolidated
statement of profit or loss for the period. The carrying values of property and equipment
are reviewed for impairment when events or changes in circumstances indicate the carrying
value may not be recoverable. If any such indication exists and where the carrying values
exceed the estimated recoverable amount, the assets are written down to their recoverable
amount, being the higher of their fair value less costs to sell and their value in use.

Properties in the course of construction for production, supply or administrative purposes are
carried at cost, less any recognized impairment losses. Cost includes professional fees and,
for qualifying assets, borrowing costs capitalized in accordance with the Group’s accounting
policy. Such properties are classified in the appropriate categories of property and equipment
when completed and ready for intended use. Depreciation of these assets, on the same basis
as other property assets, commences when the assets are ready for their intended use.
Notwithstanding the contractual term of the leases, management considers that, the
agreement of leasehold land is renewable indefinitely, at similar nominal rates of ground
rent and with no premium payable for renewal of the lease and, consequently, as is common
practice in Kuwait, these leases have been accounted for as freehold land. The management
does a revaluation of the leasehold land on a cyclic basis at a regular interval every year.

Leasehold land are shown at fair value, based on valuations carried out every year by external
independent valuers. Increases in the carrying amount arising on revaluation of leasehold
land are credited to revaluation surplus in other comprehensive income. Decreases that
offset previous increases of the same asset are charged against revaluation surplus directly in
other comprehensive income to the extent that such decrease relates to an increase on the
same asset previously recognized. All other decreases are charged to consolidated statement
of profit or loss for the year.
When revalued assets are sold, the amounts included in revaluation surplus are transferred
to retained earnings.

Depreciation is computed on a straight-line basis over the estimated useful lives of other
property and equipment as follows:

59 JTC LogisTiCs TransporTaTion & sTevedoring Company K.s.C.p.