2. MATERIAL ACCOUNTING POLICY INFORMATION (CONT’D.) 2.8 Inventories Inventories are stated at the lower of costs and net realisable value. (a) Land held for property development Land held for property development consists of land where no development activities have been carried out or where development activities are not expected to be completed within the normal operating cycle. Such land is classified within non-current assets. Land held for property development is reclassified as property development costs at the point when development activities have commenced and where it can be demonstrated that the development activities can be completed within the normal operating cycle. (b) Property development costs The cost of land, related development costs common to entire development project and direct building costs less cumulative amounts recognised as expense in the profit or loss for property under development are carried in the statements of financial position as property development costs. The property development cost is subsequently recognised as an expense in profit or loss as and when the control of the inventory is transferred to the customer. Property development cost of unsold unit is transferred to completed development unit once the development is completed. (c) Completed development properties Completed development properties represent completed residential properties and commercial properties. (d) Land held for sale Land held for sale represents undeveloped land acquired or held with the intention of resale in the ordinary course of business. (e) Consumable stores and spares Inventories of consumables stores and spares are stated at the lower of cost and net realisable value. Cost is determined on the first-in, first-out basis. The cost of raw materials comprises all costs of purchase plus the cost of bringing the inventories to their present location and condition. Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale. FINANCIAL STATEMENTS & OTHER INFORMATION 251
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