Annual Report 2012 - Dialog

(iii) Net investment hedge
Annual Report 2012 l Dialog Axiata PLC l 67
Hedges of net investments in foreign operations are accounted for similarly to cash flow hedges.
Any gain or loss on the hedging instrument relating to the effective portion of the hedge is recognised in statement of
comprehensive income within ‘other comprehensive income’. The gain or loss relating to the ineffective portion is recognised
immediately in the statement of comprehensive income within ‘other gains/(losses) – net’. Gains and losses accumulated in
equity are included in the statement of comprehensive income when the foreign operation is partially disposed of or sold.
2.9 Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is determined on a weighted average basis and
comprises all expenses incurred in bringing the inventories to their present location and condition. Net realisable value is
the estimated selling price in the ordinary course of business, less applicable variable selling expenses. In arriving at the net
realisable value, due allowance is made for all obsolete and slow moving items.
2.10 Trade and other receivables
Trade receivables are amounts due from customers for merchandise sold or services performed in the ordinary course of
business. If collection is expected in one year or less (or in the normal operating cycle of the business if longer), they are
classified as current assets. If not, they are presented as non-current assets.
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective
interest method, less accumulated impairment losses.
2.11 Cash and cash equivalents
For the purpose of the statements of cash flows, cash and cash equivalents includes cash in hand, deposits held at call with
banks, other short-term highly liquid investments with original maturities of three month or less and bank overdrafts. Bank
overdrafts are shown within borrowings in current liabilities in the statement of financial position.
2.12 Stated capital
(a) Classification
Ordinary shares with discretionary dividends are classified as equity. Other shares are classified as equity or liability according
to the economic substance of the particular instrument. Distribution to holders of a financial instrument classified as an equity
instrument is charged directly to equity.
(b) Share issue expenses
Incremental costs directly attributable to the issuance of new shares or options are shown in equity as a deduction, net of tax
from the proceeds.
(c) Dividend to shareholders of the Company
Dividend distribution to the Company’s shareholders is recognised as a liability in the Company’s and the Group’s financial
statements in the period in which the dividends are approved by the Company’s shareholders.
2.13 Trade and other payables
Trade and other payables are obligations to pay for goods or services that have been acquired in the ordinary course of
business from suppliers. Accounts payable are classified as current liabilities if payment is due within one (1) year or less (or
in the normal operating cycle of the business if longer). If not, they are presented as non-current liabilities.