Annual Report 2011 - 2012 - Colombo Stock Exchange

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NOTES TO THE FINANCIAL STATEMENTS Year ended 31 March 2012
2.4.8. Property, Plant & Equipment
Property, plant & equipment are stated at cost, excluding the costs of day to day servicing, less accumulated depreciation and accumulated
impairment in value. Such cost includes the cost of replacing part of the plant and equipment when that cost is incurred, if the recognition
criteria are met.
Land and buildings are measured at fair value less depreciation on buildings and impairment charged subsequent to the date of the revaluation.
Depreciation is charged to the income statement on straight-line basis.
Valuations are performed every 3-5 years (or frequently enough) to ensure that the fair value of a revalued asset does not differ materially from
its carrying amount.
Any revaluation surplus is credited to the revaluation reserve included in the equity section of the balance sheet, except to the extent that it
reverses a revaluation decrease of the same asset previously recognised in profit or loss, in which case the increase is recognised in profit or
loss. A revaluation deficit is recognised in profit or loss, except that a deficit directly offsetting a previous surplus on the same asset is directly
offset against the surplus in the asset revaluation reserve.
An item of property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected from its use or
disposal. Any gain or loss arising on derecognition of the assets (calculated as the difference between the net disposal proceeds and the carrying
amount of the assets) is included in the income statement in the year the asset is derecognized.
The assets’ residual values, useful lives and methods of depreciation are reviewed and adjusted if appropriate, at each financial year end.
2.4.9. Investment Property
Investment properties are measured initially at cost, including transaction costs. The carrying amount includes the cost of replacing part of an
existing investment property at the time that cost is incurred if the recognition criteria are met; and excludes the costs of day-to-day servicing
of an investment property.
Subsequent to initial recognition, investment properties are stated at fair value, which reflects market conditions at the reporting date. Gains
or losses arising from changes in the fair values of investment properties are included in the income statement in the year in which they arise.
Investment properties are derecognized when disposed or permanently withdrawn from use and no future economic benefits are expected. Any
gains or losses on retirement or disposal are recognized in the income statement in the year of retirement or disposal.
Transfers are made to investment property, when there is a change in use, evidenced by end of owner occupation, commencement of an
operating lease to another party or ending of construction or development. Transfers are made from investment property, when there is a
change in use, evidenced by commencement of owner occupation or commencement of development with a view to sale.
2.4.10. Intangible Assets
Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at
cost less any accumulated amortization and any accumulated impairment losses. Internally generated intangible assets, excluding capitalized
development costs, are not capitalized and expenditure is reflected in the income statement in the year in which the expenditure is incurred.
Intangible assets with finite lives are amortised over the useful economic life and assessed for impairment whenever there is an indication that
the intangible assets may be impaired. The amortisation period and the amortization method for intangible assets with finite useful life is
reviewed at least at each financial year end. Changes in the expected useful life or the expected pattern of consumption of future economic
benefits embodied in the asset is accounted for by changing the amortisation period or method, as appropriate, and treated as changes in
The Colombo Pharmacy Company PLC
Annual Report 2011 - 2012
Notes to the Financial Statements
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