included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the items can be measured reliably. The carrying amount of the replaced part is derecognised. The cost of major overhaul/inspection is recognised in the asset’s carrying amount as a replacement and the remaining carrying amount of the previous major overhaul/inspection is derecognised. Major spare parts and standby equipment are recognised as assets when the Group and the Company expect to use for more than one period. Similarly, if the spare parts and servicing equipment can be used only in connection with an item of PPE, they are accounted for as PPE. Gains or losses on disposal of PPE are determined by reference to theircarrying amount and are recognised in statement of profit or loss. NOTES TO THE FINANCIAL STATEMENTS 31 December 2023 TENAGA NASIONAL BERHAD Integrated Annual Report 2023 220 5 PROPERTY, PLANT AND EQUIPMENT (‘PPE’) (CONTINUED) Accounting Policy (continued) Freehold land and capital work-in-progress are not depreciated. Other PPE are depreciated on the straight line method to allocate the cost to their residual values over their estimated useful lives, summarised as follows: Buildings and civil works 10 - 100 years Plant and machinery 3 - 50 years Lines and distribution mains 10 - 50 years Distribution services 25 years Meters 10 - 15 years Public lighting 15 - 25 years Furniture, fittings and office equipment 3 - 15 years Motor vehicles 5 - 20 years Residual values and useful lives of assets are reviewed and adjusted if appropriate, on an annual basis. At the end of the reporting period, the Group and the Company assess whether there is any indication of impairment. If such indications exist, an analysis is performed to assess whether the carrying amount of the asset is fully recoverable. An impairment loss is recognised if the carrying amount exceeds the recoverable amount (Note 3(c)). As at 1.1.2023 RM’million Effect of changes in