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SUNNINGDALE TECH LTD
ANNUAL REPORT 2014
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 December 2014
NOTES TO THE FINANCIAL STATEMENTS
2.
Summary of significant accounting policies (cont’d)
2.13
Impairment of financial assets (cont’d)
(c)
Available-for-sale financial assets (cont’d)
If an available-for-sale financial asset is impaired, an amount comprising the difference between its acquisition cost (net
of any principal repayment and amortisation) and its current fair value, less any impairment loss previously recognised in
profit or loss, is transferred from other comprehensive income and recognised in profit or loss. Reversals of impairment
losses in respect of equity instruments are not recognised in profit or loss; increase in their fair value after impairment
are recognised directly in other comprehensive income.
In the case of debt instruments classified as available-for-sale, impairment is assessed based on the same criteria as
financial assets carried at amortised cost. However, the amount recorded for impairment is the cumulative loss measured
as the difference between the amortised cost and the current fair value, less any impairment loss on that investment
previously recognised in profit or loss. Future interest income continues to be accrued based on the reduced carrying
amount of the asset, using the rate of interest used to discount the future cash flows for the purpose of measuring the
impairment loss. The interest income is recorded as part of financial income. If, in a subsequent year, the fair value of a
debt instrument increases and the increases can be objectively related to an event occurring after the impairment loss
was recognised in profit or loss, the impairment loss is reversed in profit or loss.
2.14
Cash and cash equivalents
Cash and cash equivalents comprise cash at banks and on hand, demand deposits and short-term, highly liquid investments
that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. These
also include bank overdrafts that form an integral part of the Group’s cash management.
2.15
Inventories
(a)
Plastic products
Inventories are stated at the lower of cost and net realisable value. Costs incurred in bringing the inventories to their
present location and conditions are accounted for as follows:
–
Raw materials – purchase costs on a first-in first-out basis;
–
Finished goods – costs of direct materials and labour and a proportion of manufacturing overheads based on
normal operating capacity. These costs are assigned on a first-in first-out basis.
Where necessary, allowance is provided for damaged, obsolete and slow moving items to adjust the carrying value of
inventories to 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 the estimated costs necessary to make the sale.
(b)
Mould fabrication contracts
Work in progress from mould fabrication contracts are stated at cost plus recognised profits less the sum of recognised
losses and progress billings for all contracts in progress for which costs incurred plus recognised profits (less recognised
losses) exceeds progress billings.
Excess of progress billings over work in progress from mould fabrication contracts are stated at cost plus recognised
profits less the sum of recognised losses and progress billings for all contracts in progress for which for progress billings
exceed costs incurred plus recognised profits (less recognised losses).
