annual report 2005 - Pumpkin Patch investor relations

Pumpkin Patch Limited & Subsidiaries statements of accounting policies
for the 12 months ended 31 July 2005
depreciation
Depreciation on property, plant and equipment, other than freehold land, has been calculated on a straight line basis so
as to expense the cost of the assets to their residual values over their useful lives as follows:
Shop Fit Out
Office Equipment
Point of Sale Equipment
Computer Equipment & Software
Motor Vehicles
Plant and Machinery
Furniture and Fittings
Leasehold Improvements
3 – 10 years
3 – 10 years
3 years
3 – 5 years
4 – 5 years
2 – 14 years
3 – 10 years
6 – 7 years
leased assets
Operating lease payments are representative of the pattern of benefits derived from the leased assets and
accordingly are charged to the statements of financial performance in the periods in which they are incurred.
Landlord contributions to fit-out costs are recognised in the statements of financial performance over the minimum
period of the lease, as a reduction in operating lease costs.
investments
Investments in subsidiaries are stated at the lower of cost or net realisable value. Other investments are stated at the
lower of cost or net realisable value.
intangibles
The excess of cost over the fair value of the net assets of the subsidiary entities is recognised as goodwill and is amortised
to the statements of financial performance on a straight line basis over the shorter of its estimated life or five years.
Other intangibles comprise of the cost of registering trademarks. These are amortised over their anticipated useful lives
which range between 5 and 10 years.
inventories
Raw materials and finished goods are stated at the lower of average weighted cost and net realisable value.
Cost is determined on a first in, first out basis.
accounts receivable
Accounts receivable are carried at estimated realisable value after providing against debts where collection is doubtful.
impairment
Annually, the directors assess the carrying value of each asset. Where the estimated recoverable amount of the asset
is less than its carrying amount, the asset is written down. The impairment loss is recognised in the statements of
financial performance.
employee entitlements
Employee entitlements to salaries and wages, annual leave, long service leave and other benefits are recognised
when they accrue to employees.
The liability for employee entitlements is carried at the present value of the estimated future cash outflows.
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