notes to the financial statements - Investor Relations

CWT Limited
66
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2011
3 SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
3.5 Intangible assets (cont’d)
Other intangible assets (cont’d)
• Business Relationships (“BRS”)
BRS were acquired in a business combination by the Group and have finite useful lives. It is measured at cost less
accumulated amortisation and impairment losses.
BRS is amortised to profit or loss using the straight-line basis over its estimated useful life of 10 years.
• Brand (“BD”)
BD was acquired in a business combination by the Group and has finite useful life. It is measured at cost less
accumulated amortisation and impairment losses.
BD is amortised to profit and loss on a straight-line basis over its estimated useful life of 5 years.
The amortisation period and amortisation method of intangible assets are reviewed at each reporting date.
3.6 Inventories
Inventories are stated at the lower of cost and net realisable value. Net realisable value is 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.
Allowance is made where necessary for obsolete, slow moving and defective inventories.
(i) Commodity inventories
Cost is determined on a first-in, first-out (FIFO) basis and includes the full costs of materials, freight and insurance and
all other costs incurred in bringing the inventories to their present conditions and location.
(ii) Inventories of other businesses
Cost is calculated using the weighted average cost formula or and on a first-in, first-out (FIFO) basis as appropriate
and includes all costs of purchase, costs of conversion, freight and insurance and other costs incurred in bringing the
inventories to their present location and condition.
3.7 Contract work-in-progress
Contract work-in-progress comprises uncompleted service contracts.
Contract work-in-progress at the reporting date is recorded in the statement of financial position at cost plus attributable
profit less recognised losses, net of progress billings and allowances for foreseeable losses, and is presented in the statement
of financial position as contract work-in-progress (as an asset) or as excess of progress billings over contract work-inprogress
(as a liability), as applicable. Cost includes all expenditure related directly to specific contracts and an allocation of
fixed and variable overheads incurred in the Group’s contract activities based on normal operating capacity.
Allowance is made where applicable for any foreseeable losses on uncompleted contracts as soon as the possibility of the
loss is ascertained.
Progress claims not yet paid by the customer are included in the statement of financial position under progress billings
receivable.