prospectus for - Pumpkin Patch investor relations

PUMPKIN PATCH LIMITED & SUBSIDIARIESSTATEMENT OF ACCOUNTING POLICIESFOR THE 6 MONTHS ENDED 31 JANUARY 2004 (CONTINUED)ImpairmentAnnually, the directors assess the carrying value of each asset.Where the estimated recoverable amount of theasset is less than its carrying amount, the asset is written down. The impairment loss is recognised in thestatements of financial performance.Employee EntitlementsEmployee entitlements to salaries and wages, annual leave, long service leave and other benefits arerecognised when they accrue to employees.The liability for employee entitlements is carried at the present value of the estimated future cash outflows.Financial InstrumentsRecognisedFinancial instruments carried on the statement of financial position include cash and bank balances,investments, receivables, trade creditors and borrowings. The particular recognition methods adopted aredisclosed in the individual policy statements associated with each item.Forward exchange contracts entered into as hedges of foreign exchange assets and liabilities are valued atexchange rates prevailing at period end. Any unrealised gains or losses are offset against foreign exchangegains and losses on the related asset or liability. Premiums paid on currency options are amortised over theperiod to maturity.UnrecognisedFinancial instruments with off-balance sheet risk, have been entered into for the primary purpose of reducingexposure to fluctuations in foreign exchange rates and interest rates. While financial instruments are subject torisk that market rates may change subsequent to acquisition, such changes would generally be offset byopposite effects on the items hedged.Financial instruments purchased with the intention to be held for the long term or until maturity are recordedat original cost, adjusted for amortisation of premiums and discounts to maturity.Statements of CashflowsThe following are the definitions of the terms used in the Statements of Cashflows:(i)(ii)(iii)(iv)Cash is considered to be cash on hand and current accounts in the bank, net of bank overdrafts.Investing activities are those activities relating to the acquisition, holding and disposal of property, plantand equipment and of investments. Investments can include securities not falling within the definition ofcash.Financing activities are those activities which result in changes in the size and composition of the capitalstructure of the Group. This includes both equity and debt not falling within the definition of cash.Dividends paid in relation to the capital structure are included in financing activities.Operating activities include all transactions and other events that are not investing or financing activities.Changes in Accounting PoliciesThere were no changes to accounting policies during the period.52