Accounting policies-notes to the accounts, Financial Accounting

Accounting Policies

These financial statements have been prepared under the historical cost basis of accounting which is modified to accommodate the revaluation of certain property, plant and equipment.

Property, plant and equipment are stated in the accounts of cost or revalued amount less accumulated depreciation. Depreciation is based on the estimated useful life of the asset and is provided at the following rates:

Assets                                         Rate
Land                                       No depreciation
Buildings                                 2 % on cost
Plant and machinery                 20% on cost
Fixtures, furniture and fittings    25% on cost
Motors vehicles                        30% on reducing balance

Inventory is stated at the lower of cost and net realizable value. Cost represents the purchase price or production cost and other expenses incurred to get the inventory ready for sale. Net realizable value is the selling price of the inventory less other expenses that will be incurred to get he inventory ready for sale.

Posted Date: 12/12/2012 12:13:39 AM | Location : United States

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