enl commercial limited annual report 2011 - Investing In Africa

Notes to the Financial Statements
Year ended June 30, 2011
2 SIGNIFICANT ACCOUNTING POLICIES (continued)
(c)
Investments in associates (continued)
Consolidated financial statements (continued)
The results of associated companies acquired or disposed of during the year are included on the
consolidated statement of comprehensive income from the date of their acquisition or up to the date
of their disposal.
Unrealised profits and losses are eliminated to the extent of the group’s interests in the associate.
Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of
the assets transferred.
Where necessary, appropriate adjustments are made to the financial statements of associates to bring
the accounting policies used in line with those adopted by the group.
If the ownership in an associate is reduced but significant influence is retained, only a proportionate
share of the amounts previously recognised in other comprehensive income are reclassified to profit
or loss where appropriate.
(d) Property, plant and equipment
All property, plant and equipment are initially recorded at cost, some of which are subsequently shown
at revalued amount, less subsequent depreciation. All other property, plant and equipment are stated
at historical cost less depreciation. Historical cost includes expenditure that is directly attributable
to the acquisition of the items. Subsequent costs are included in the assets’ carrying amount or
recognised as a separate asset as appropriate, only when it is probable that future economic benefits
associated with the item will flow to the group and the cost can be measured reliably.
Increases in the carrying amount arising on revaluation are credited to revaluation surplus in shareholders’
equity. Decreases that offset previous increases of the same asset are charged against the revaluation
surplus directly in equity. All other decreases are charged to the statement of comprehensive income.
Depreciation is calculated on a straight line method to write off the cost or revalued amounts of the
assets, with the exception of land, to their residual values over their estimated useful lives as follows:
Years
Buildings 10 - 50
Plant and equipment 5 - 10
Motor vehicles 7 - 10
Furniture and fittings 5 - 20
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of
each reporting period.
When the carrying amount of an asset is greater than its estimated recoverable amount, it is written
down immediately to its recoverable amount.
Gains and losses on disposals of property, plant and equipment are determined by comparing
proceeds with carrying amount and are included on the statement of comprehensive income.
On disposal of revalued assets, amounts in revaluation surplus relating to that asset are transferred to
retained earnings.
(e)
(i)
Intangible assets
Goodwill
Goodwill represents the excess of cost of acquisition over the group’s interests in the fair value of
the net identifiable assets of the acquired subsidiary or associated entity at the date of acquisition.
Goodwill on acquisition of associates is included in investments in associates. Any net excess of the
group’s interests in the net fair value of the acquiree’s net identifiable assets over cost is recognised
on the statement of comprehensive income.
Goodwill is tested annually for impairment and carried at cost less accumulated impairment losses.
On disposal of a subsidiary company or associated company, the attributable amount of goodwill is
included in the determination of the gains and losses on disposal.
Goodwill is allocated to cash-generating units for the purpose of impairment testing.
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ENL Commercial Limited
Annual Report 2011