GPERAK-AnnualReport2009 (1MB).pdf - Bursa Malaysia

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annual report 2009 | Gula peraK BerHaD (8104-X)
NOTES TO THE FINANCIAL STATEMENTS (Cont’d)
3. SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
Inventories
Completed development properties held for sale are valued at the lower of cost and net realisable value. The cost is
determined on the specific identification method.
Land held for sale are stated at acquisition costs which is determined on the specific identification method.
Estate consumables, food, beverages and supplies are valued at the lower of cost and net realisable value. Cost is determined
on a weighted average basis.
Net realisable value represents the estimated selling price in the ordinary course of business less selling and distribution
costs and all other estimated costs to completion.
Impairment of Assets
The carrying amounts of property, plant and equipment, land held for property development, investment properties and
investment in subsidiary companies are reviewed at each balance sheet date to determine whether there is any indication
of impairment. If any such indication exists, the asset’s recoverable amount is estimated. An impairment loss is recognised
whenever the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount.
Recoverable amount is the higher of fair value less costs to sell and value-in-use. In assessing value-in-use, the estimated
future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments
of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been
adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying
amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised
immediately in the income statements, unless the relevant asset is carried at a revalued amount, in which case the impairment
loss is treated as a revaluation decrease.
Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased
to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying
amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in
prior years. A reversal of an impairment loss is recognised immediately in the income statements, unless the relevant asset
is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
Receivables
Trade and other receivables are stated at nominal value as reduced by the appropriate allowance for estimated irrecoverable
amounts. Allowance for doubtful receivables is made based on estimates of possible losses which may arise from noncollection
of certain receivable accounts.
Provisions
Provisions are made when the Company has a present legal or constructive obligation as a result of past events, when it is
probable that an outflow of resources will be required to settle the obligation, and when a reliable estimate of the amount
can be made. Provisions are measured at the directors’ best estimate of the amount required to settle the obligation at the
balance sheet date, and are discounted to present value where the effect is material.
At each balance sheet date, the provisions are reviewed by the directors and adjusted to reflect the current best estimate.
The provisions are reversed if it is no longer probable that the Company will be required to settle the obligation.