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Gamuda Berhad (29579-T) • Annual Report 2012
2.
Summary of significant accounting policies (cont’d.)
2.15 Impairment of non-financial assets (cont’d.)
An assessment is made at each reporting date as to whether there is any indication that previously recognised
impairment losses may no longer exist or may have decreased. A previously recognised impairment loss is
reversed only if there has been a change in the estimates used to determine the asset’s recoverable amount
since the last impairment loss was recognised. If that is the case, the carrying amount of the asset is increased
to its recoverable amount. That increase cannot exceed the carrying amount that would have been determined,
net of depreciation, had no impairment loss been recognised previously. Such reversal is recognised in profit
or loss unless the asset is measured at revalued amount, in which case the reversal is treated as a revaluation
increase. Impairment loss on goodwill is not reversed in a subsequent period.
2.16 Inventories
Inventories are stated at the lower of cost and net realisable value.
Cost is determined using the weighted average cost method. The cost of raw materials includes the cost of
purchase and other direct charges. The cost of finished goods and work-in-progress comprise raw materials,
direct labour, other direct costs and appropriate proportions of production overheads. The cost of unsold
properties comprises cost associated with the acquisition of land, direct costs and appropriate proportions of
common costs.
Net realisable value represents the estimated selling price in the ordinary course of business less the estimated
costs of completion and the estimated costs necessary to make the sale.
2.17 Leases
a)
As lessee
Finance leases, which transfer to the Group substantially all the risks and rewards incidental to ownership
of the leased item, are capitalised at the inception of the lease at the fair value of the leased asset or,
if lower, at the present value of the minimum lease payments. Any initial direct costs are also added to
the amount capitalised. Lease payments are apportioned between the finance charges and reduction
of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability.
Finance charges are charged to profit or loss. Contingent rents, if any, are charged as expenses in the
periods in which they are incurred.
Leased assets are depreciated over the estimated useful life of the asset. however, if there is no
reasonable certainty that the Group will obtain ownership by the end of the lease term, the asset is
depreciated over the shorter of the estimated useful life and the lease term.
operating lease payments are recognised as an expense in profit or loss on a straight-line basis over the
lease term. The aggregate benefit of incentives provided by the lessor is recognised as a reduction of
rental expense over the lease term on a straight-line basis.
NoTES To ThE FINANCIAL STATEMENTS
31 July 2012