Annual Report.CDR - Colombo Stock Exchange

S I G N I F I C A N T A C C O U N T I N G P O L I C I E S
4.4. Investments
4.4.1. Investment Property
Investment property, which is property held to earn rentals and /or for capital
appreciation, is measured initially at its costs, including transaction costs.
Subsequent to initial recognition, investment property is measured at fair value.
Gains and losses arising from changes in the fair value of investment property are
included in profit or loss in the period in which they arise. The Board of Directors
determines the fair value of the investment properties.
4.4.2. Dealing Securities
Dealing Securities are stated at lower of cost and market value determined on an
aggregate portfolio basis.
4.4.3. Investment Securities
All quoted and unquoted securities, which are held on long-term and medium basis
are valued at cost. The carrying amounts of long-term investments are reduced to
recognize a decline, which is considered other than temporary, in the value of
investments, determined on an individual investment basis.
4.4.4. Investments in Government Securities
Investments in Government Securities represent Sri Lanka Government Treasury
Bills, Sri Lanka Government Securities and Central Bank of Sri Lanka Securities,
which are accounted for, at cost plus a portion of discount/premium accrued thereon.
4.5. Property, Plant & Equipment
Land and buildings held for use in the supply of services, or for administrative purposes, are
stated in the balance sheet at their revalued amounts, being the fair value at the date of
revaluation, less any subsequent accumulated depreciation and subsequent accumulated
impairment losses.
Any revaluation increase arising on the revaluation of such land and buildings is credited in
equity to the properties revaluation reserve, except to the extent that it reverses a revaluation
decrease for the same asset previously recognized in profit or loss, in which case the
increase is credited to profit or loss to the extent of the decrease previously charged. A
decrease in the carrying amount arising on the revaluation of such land and buildings is
charged to profit or loss to the extent that it exceeds the balance, if any, held in the properties
revaluation reserve relating to a previous revaluation of that asset.
Depreciation on revalued buildings is charged to profit or loss. On the subsequent sale or
retirement of a revalued property, the attributable revaluation surplus remaining in the
properties revaluation reserve is transferred directly to retained earnings.
Properties in the course of construction for production, rental, or administrative purpose, or
for purposes not yet determined, are carried at cost, less any recognized impairment loss.
Cost includes professional fees and, for qualifying assets, borrowing costs capitalized in
accordance with the company's accounting policy. Depreciation of these assets, on the same
basis as other property assets, commences when the assets are ready for their intended use.
Fixtures and equipment are stated at cost less accumulated depreciation and accumulated
impairment losses.
T H E F I N A N C E C O . P L C - A N N U A L R E P O RT 2 0 0 9 - 2 0 1 0
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