94 / 168
Datasonic Group Berhad
(Company No. 809759-X)
92
NOTES TO THE FINANCIAL STATEMENTS
for the financial year ended 31 March 2016
(Continued)
4.
SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
4.10 IMPAIRMENT (Cont’d)
(b) Impairment of Non-Financial Assets (Cont’d)
An impairment loss is recognised in profit or loss immediately unless the asset is carried at
its revalued amount. Any impairment loss of a revalued asset is treated as a revaluation
decrease to the extent of a previously recognised revaluation surplus for the same asset.
Impairment losses recognised in respect of cash-generating units are allocated first to
reduce the carrying amount of any goodwill allocated to the cash-generating units and
then to reduce the carrying amounts of the other assets in the cash-generating unit on a
pro rate basis.
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 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 as property,
plant and equipment and the corresponding obligations are treated as hire purchase payables.
The assets capitalised are measured at the lower of the fair value of the leased assets and
the present value of the minimum lease payments and are depreciated on the same basis
as owned assets. Each hire purchase payment is allocated between the liability and finance
charges so as to achieve a constant periodic rate of charge on the hire purchase outstanding.
Finance charges are recognised in profit or loss over the period of the respective hire purchase
agreements.