L a p o r a n T a h u n a n 2 0 0 0 A n n u a l R e p o r t - ChartNexus

Notes to the Financial Statements (continued)For the financial period of seventeen months ended 31 December 20003 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)(l)Completed propertiesProperties which have been completed but not sold are classified as completed properties and are stated atthe lower of cost and net realisable value.Net realisable value is the estimate of the selling price in the ordinary course of business, less the cost ofcompletion and selling expenses.(m) Development propertiesDevelopment properties consist of freehold land at cost or valuation, development expenditure at cost, plusattributable profit less progress billings and provision for foreseeable losses.Development expenditure includes borrowing costs related to the financing of the land and development,related development costs common to the development project and direct construction costs. Borrowingcosts are included in the development expenditure until the completion of the development projects.Provision for foreseeable losses on uncompleted projects are made in the financial period in which suchlosses are determined.Development pro p e rties are classified as current assets when significant development work have beenundertaken and are expected to be completed within the normal operating cycle.(n)Profit recognition on property developmentP rofit from pro p e rty development consists of profit from the sale of pro p e rties both completed anduncompleted. Profit on uncompleted properties is accrued appropriate to the stage of completion. Thestage of completion of the pro p e rty development activity is measured by re f e rence to the physicalproportion of work completed as a percentage of the total physical work of the project as certified by dulyappointed consultants.(o)DividendsDividends on ordinary shares are accounted for in shareholders’ equity as an appropriation of retainedearnings in the financial period in which they are declared/proposed.(p)Cash and cash equivalentsCash and cash equivalents comprise cash in hand, bank balances, demand deposits, bank overdrafts andshort-term, highly liquid investments that are readily convertible to known amounts of cash and which aresubject to an insignificant risk of changes in value.(q)Deferred expenditureDeferred expenditure comprises preliminary and pre-operating expenses which were previously stated at costand were amortised over a period of five years upon commencement of operations.Following the adoption of MASB Interpretation Bulletin 1, “Preliminary and Pre-operating Expenditure”,the Company has changed its accounting policy to recognise all deferred expenditure as expenses in thefinancial period in which they arise. This change in accounting policy has been accounted forretrospectively and the effects of the change is disclosed in Note 25 to the financial statements.(r)ComparativesComparatives figures have been adjusted to conform with changes in presentation resulting from the changein accounting policy explained in Note 25 to the financial statements. The comparatives figures were alsoextended to comply with the additional disclosure requirements of the 7 new MASB Standards that areapplicable for the financial period of seventeen months ended 31 December 2000.With the exception of MASB Interpretation Bulletin 1 “Preliminary and Pre-operating Expenditure”, thereare no changes in accounting policy that affect the net profit attributable to shareholders due to theadoption of the above standards in these financial statements as the Group was already following therecognition and measurement principles in those standards.UNITED MALAYAN LAND BHD47