Sun Art Retail Group Limited - TodayIR.com

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(l)
Impairment of assets (continued)
(ii)
Impairment of other assets (continued)
– Reversals of impairment losses
In respect of assets other than goodwill, an impairment loss is reversed if
there has been a favourable change in the estimates used to determine the
recoverable amount. An impairment loss in respect of goodwill is not reversed.
A reversal of an impairment loss is limited to the asset’s carrying amount that
would have been determined had no impairment loss been recognised in prior
years. Reversals of impairment losses are credited to profit or loss in the year
in which the reversals are recognised.
(iii)
Interim financial reporting and impairment
Under the Rules Governing the Listing of Securities on the Stock Exchange of
Hong Kong Limited, the Group is required to prepare an interim financial report in
compliance with HKAS 34, Interim financial reporting, in respect of the first six months
of the financial year. At the end of the interim period, the Group applies the same
impairment testing, recognition, and reversal criteria as it would at the end of the
financial year (see notes 1(l)(i) and (ii)).
Impairment losses recognised in an interim period in respect of goodwill are not
reversed in a subsequent period. This is the case even if no loss, or a smaller loss,
would have been recognised had the impairment been assessed only at the end of
the financial year to which the interim period relates.
(m)
Inventories
Inventories are carried at the lower of cost and net realisable value. Cost is calculated
using the weighted average cost formula and comprises the purchase cost of goods after
deducting discounts and payments from suppliers, except where such payments represent
a reimbursement of identifiable expenditure incurred by the Group or relate to services
provided by the Group which provide identifiable benefits to the suppliers separate from the
Group’s purchase of the supplier’s goods. Supplier payments include cash or its equivalent
in form (e.g. credits applied to future purchases). Net realisable value is the estimated selling
price in the ordinary course of business.
When inventories are sold, the carrying amount of those inventories is recognised as an
expense in the period in which the related revenue is recognised. The amount of any writedown
of inventories to net realisable value and all losses of inventories are recognised as
an expense in the period the write-down or loss occurs. The amount of any reversal of any
write-down of inventories is recognised as a reduction in the amount of inventories recognised
as an expense in the period in which the reversal occurs.
Sun Art Retail Group Limited
Annual Report 2012
67