Annual Report 2011 - Food Junction

Notes to the Financial Statements (cont’d)
31 December 2011
2. Summary of significant accounting policies (cont’d)
2.3 Standards issued but not yet effective
The Group and the Company have not adopted the following standards and interpretations that have
been issued but not yet effective:
Description
Effective for annual
periods beginning
on or after
Amendments to FRS 107 Disclosures – Transfers of Financial Assets 1 July 2011
Amendments to FRS 12 Deferred Tax: Recovery of Underlying Assets 1 January 2012
Amendments to FRS 1 Presentation of Items of Other Comprehensive Income 1 July 2012
Revised FRS 19 Employee Benefits 1 January 2013
Revised FRS 27 Separate Financial Statements 1 January 2013
Revised FRS 28 Investments in Associates and Joint Ventures 1 January 2013
FRS 110 Consolidated Financial Statements 1 January 2013
FRS 111 Joint Arrangements 1 January 2013
FRS 112 Disclosure of Interests in Other Entities 1 January 2013
FRS 113 Fair Value Measurements 1 January 2013
The directors expect that the adoption of the standards and interpretations above will have no material
impact on the financial statements in the period of initial application.
2.4 Significant accounting estimates and judgements
The preparation of the Group’s consolidated financial statements requires management to make
judgements, estimates and assumptions that affect the reported amounts of revenues, expenses,
assets and liabilities, and the disclosure of contingent liabilities at the end of each reporting period.
However, uncertainty about these assumptions and estimates could result in outcomes that could
require a material adjustment to the carrying amount of the asset or liability affected in the future
periods.
(a) Key sources of estimation uncertainty
The key assumptions concerning the future and other key sources of estimation uncertainty at
the end of each reporting period, that have a significant risk of causing a material adjustment to
the carrying amounts of assets and liabilities within the next financial year are discussed below:
(i) Useful lives of fixed assets
Fixed assets are depreciated on a straight-line basis over their estimated useful lives.
Management estimates the useful lives of these fixed assets to be 6 years or the lease
period. Changes in the expected level of usage and technological developments could
impact the economic useful lives of these assets, therefore future depreciation charges
could be revised. The carrying amount of the Group’s fixed assets at 31 December 2011 is
disclosed in Note 3.
(ii) Impairment of loans and receivables
The Group assesses at the end of each reporting period whether there is any objective
evidence that a financial asset is impaired. To determine whether there is objective
evidence of impairment, the Group considers factors such as the probability of insolvency
or significant financial difficulties of the debtor and default or significant delay in
payments.
Where there is objective evidence of impairment, the amount and timing of future cash
flows are estimated based on historical loss experience for assets with similar credit risk
characteristics. The carrying amount of the Group’s loans and receivables at 31 December
2011 is disclosed in Note 6.
Annual Report 55