69
TEHO INTERNATIONAL INC LTD.
Annual Report 2016
NOTES
TO THE FINANCIAL STATEMENTS
Year ended 30 June 2016
9 INVENTORIES (CONT’D)
In 2016, inventories and changes in finished goods included as cost of sales amounted
to $34,146,272 (2015: $36,453,504).
A review is made periodically on inventory for excess inventory and declines in net
realisable value below cost and an allowance is recorded against the inventory balance
for any such declines. The review requires management to consider the future demand
for the products. In any case the realisable value represents the best estimate of the
recoverable amount and is based on the acceptable evidence available at the end of the
financial year and inherently involves estimates regarding the future expected realisable
value. The usual considerations for determining the amount of allowance or write-
down include ageing analysis, technical assessment and subsequent events. In general,
such an evaluation process requires significant judgement and materially affects the
carrying amount of inventories at the end of the financial year. Possible changes in
these estimates could result in revisions to the stated value of the inventories.
10 DEVELOPMENT PROPERTIES
Group
2016
2015
$
$
Unsold units of development properties under development
that will be recognised on percentage of completion
method:
Aggregate costs incurred
26,470,420 21,782,391
Allowance for foreseeable losses
(862,408)
(788,108)
25,608,012 20,994,283
Sold units of development properties under development
recognised on percentage of completion method:
Aggregate costs incurred and attributable profits to date 17,378,883 16,698,441
Less: Progress billings received and receivables
(17,378,883) (11,393,247)
– 5,305,194
Development properties under development recognised
on completion of construction method:
Aggregate costs incurred
19,567,058 16,390,797
Other properties under development:
Aggregate costs incurred
– 4,336,429
Total development properties
45,175,070 47,026,703
Interest expense capitalised during the financial year
as cost of development property (Note 21)
281,800 431,894
The rate of interest capitalised during the year is 2.43% - 2.58% (2015: 2.07% - 3.15%)
per annum.
In 2016, development properties recognised in cost of sales, excluding allowance for
foreseeable losses, amounted to $1,035,810 (2015: $1,673,158)
