Events 2005 - ChartNexus

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Notes to the Financial Statements 31 December 2005
5. SIGNIFICANT ACCOUNTING POLICIES (Continued)
5.4 Intangible assets (Continued)
5.4.1 Goodwill (Continued)
Goodwill on acquisition of subsidiary companies occurring on or after 1 January 2002 are retained in the consolidated
balance sheet when goodwill is considered to be capable of generating future economic benefits. The cost or carrying
amount of any retained goodwill is subject to annual review by the Directors to determine whether there is any indication
of impairment. Goodwill on acquisition that occurred prior to 1 January 2002 was charged in full to the income statement
in the year of acquisition.
The impairment loss in respect of goodwill is not reversed unless the loss was caused by a specific external event of an
exceptional nature that is not expected to recur, and subsequent external events have occurred that reverse the effect of
the specific event.
5.4.2 Radio licence
Radio licence is carried at cost less accumulated amortisation and accumulated impairment losses, if any. Amortisation is
calculated on a straight line basis to write off the cost of the radio licence over its estimated useful life which will be
expiring on 31 March 2010.
5.5 Inventories
Inventories are valued at the lower of cost and net realisable value. Cost consists of the purchase price plus the cost of
bringing the inventories to their present location and condition.
The cost of inventories is determined based on a weighted average method.
5.6 Receivables
Receivables are carried at anticipated realisable value. Known bad debts are written off and specific allowances are made
for any debts which are considered doubtful of collection. In addition, a general allowance is made on the balance of the
trade receivables to cover possible losses which are not specifically identified.
5.7 Investments
(i) Subsidiary companies
A subsidiary company is a company in which the Group has power to exercise control over the financial and operating
policies so as to obtain benefits from its activities.
Investments in subsidiary companies which are eliminated on consolidation are stated at cost less impairment losses,
if any.
(ii) Bonds
Investments in bonds are stated at cost as adjusted for amortisation of premiums or accretion of discounts allocated
on a systematic basis over the period from the date of acquisition of the bonds to the date of maturity. Amortisation
of premiums or accretion of discounts is taken up in the income statements.