NOTES TO THE FINANCIAL STATEMENTS
For The Financial Period From 1 January 2014 To 31 March 2015 (Cont’d)
73
Datasonic Group Berhad
(Company No. 809759-X)
4.
SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
4.10 IMPAIRMENT (CONT’D)
(b) Impairment of Non-Financial Assets
The carrying values of assets, other than those to which MFRS 136 Impairment of Assets
does not apply, are reviewed at the end of each financial year for impairment when there
is an indication that the assets might be impaired. Impairment is measured by comparing
the carrying values of the assets with their recoverable amounts. The recoverable amount
of the assets is the higher of the assets’ fair value less costs to sell and their value in use,
which is measured by reference to discounted future cash flow.
An impairment loss is recognised in profit or loss.
In respect of assets other than goodwill, and when there is a change in the estimates used
to determine the recoverable amount, a subsequent increase in the recoverable amount
of an asset is treated as a reversal of the previous impairment loss and is recognised to
the extent of the carrying amount of the asset that would have been determined (net of
amortisation and depreciation) had no impairment loss been recognised. The reversal is
recognised in profit or loss immediately, unless the asset is carried at its revalued amount,
in which case the reversal of the impairment loss is treated as a revaluation increase.
4.11 PROJECTS-IN-PROGRESS
Projects-in-progress represent costs incurred on projects which are not completed as at the end
of the financial period/year. Projects-in-progress is stated at cost, which includes the cost of
materials, hardware, software, directly attributable labour costs and an appropriate proportion
of directly attributable costs and overheads on such projects. When it is probable that total
project costs will exceed total project revenue, the expected loss is recognised as an expense
immediately. The revenue is recognised progressively in profit or loss upon completion of the
projects based on delivery of goods and customers’ acceptance.
4.12 INVENTORIES
Inventories are stated at the lower of cost and net realisable value. Cost is determined on the
first-in-first-out basis and comprises the purchase price, production or conversion costs and
incidentals incurred in bringing the inventories to their present location and condition.
Net realisable value represents the estimated selling price less the estimated costs of completion
and the estimated costs necessary to make the sale.
Where necessary, due allowance is made for obsolete, damaged and slowing-moving items. The
Group write down its obsolete or slowmoving inventories based on assessment of the condition
and the future demand for the inventories. These inventories are written down when events or
changes in circumstances indicate that the carrying amounts may not be recovered.
4.13 ASSETS UNDER HIRE PURCHASE
Assets acquired under hire purchase are capitalised in the financial statements at the lower of
the fair value of the leased assets and the present value of the minimum lease payments and,
are depreciated in accordance with the policy set out in Note 4.8 above. Each hire purchase
payment is allocated between the liability and finance charges so as to achieve a constant
rate on the finance balance outstanding. Finance charges are recognised in profit or loss over
the period of the respective hire purchase agreements.
