52
TEHO INTERNATIONAL INC LTD.
Annual Report 2015
3 SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
3.5 Intangible assets and goodwill (cont’d)
(ii) Other intangible assets
Other intangible assets that are acquired by the Group and have finite useful lives are
measured at cost less accumulated amortisation and accumulated impairment losses.
(iii) Subsequent expenditure
Subsequent expenditure is capitalised only when it increases the future economic
benefits embodied in the specific asset to which it relates. All other expenditure,
including expenditure on internally generated goodwill and brands, is recognised in
profit or loss as incurred.
(iv) Amortisation
Amortisation is calculated based on the cost of the asset, less its residual value.
Amortisation is recognised in profit or loss on a straight-line basis over the estimated
useful lives of intangible assets, other than goodwill, from the date that they are
available for use. The estimated useful lives for the current and comparative years are
as follows:
Customer relationships
–
5 years
Orderbook
–
Based on actual orders for 2014
Amortisation methods, useful lives and residual values are reviewed at the end of each
reporting period and adjusted if appropriate.
3.6 Leased assets
Leases in terms of which the Group assumes substantially all the risks and rewards of
ownership are classified as finance leases. Upon initial recognition, the leased asset is
measured at an amount equal to the lower of its fair value and the present value of the
minimum lease payments. Subsequent to initial recognition, the asset is accounted for in
accordance with the accounting policy applicable to that asset.
Other leases are operating leases and are not recognised in the Group’s statement of
financial position.
3 SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
3.7 Inventories
Inventories are measured at the lower of cost and net realisable value. The cost of inventories
is based on the first-in first-out principle, and includes expenditure incurred in acquiring the
inventories, production or conversion costs, and other costs incurred in bringing them to
their existing location and condition. In the case of manufactured inventories and work in
progress, cost includes an appropriate share of production overheads based on normal
operating capacity.
Net realisable value is the estimated selling price in the ordinary course of business, less the
estimated costs of completion and estimated costs necessary to make the sale.
3.8 Development properties
Development properties are properties being constructed or developed for sale. The cost
of properties under development comprises specifically identified costs, including land
acquisition costs, development expenditure, borrowing costs and other expenditure directly
attributable to the development activities. Borrowing costs payable on loans funding a
development property are capitalised, on a specific identification basis, as part of the cost
of the development property until the completion of development.
Development properties are measured at the lower of cost and net realisable value. Net
realisable value is the estimated selling price in the ordinary course of business, less
estimated costs of completion and selling expenses.
The development properties in progress have operating cycles longer than one year. Thus,
the Group includes within current assets amounts relating to the development properties in
progress realisable over a period in excess of one year.
(i) Properties under development, the sales of which are recognised using
stage of completion method
The aggregated costs incurred together with attributable profits and net of progress
billings are presented as development properties in the statement of financial position.
If progress billings exceed costs incurred plus recognised profits, the balance is
presented as deferred income.
NOTES TO THE
FINANCIAL STATEMENTS
Year ended 30 June 2015
