Financial Statements - Tung Lok Restaurants 2000 Ltd

Notes to
Financial Statements
March 31, 2008
On disposal of a subsidiary, the attributable amount of goodwill is included in the determination
of the profit or loss on disposal.
The group’s policy for goodwill arising on the acquisition of joint venture and associate is
described under “Interests in Joint Ventures” and “Associates” below.
INTANGIBLE ASSETS - Intangible assets acquired separately are reported at cost less accumulated
amortisation and accumulated impairment losses. Intangible assets with finite useful lives are
amortised on a straight-line basis over their estimated useful lives. The estimated useful life
and amortisation method are reviewed at the end of each annual reporting period, with the
effect of any changes in estimate being accounted for on a prospective basis. Intangible assets
with indefinite useful lives are not amortised. Each period, the useful lives of such assets are
reviewed to determine whether events and circumstances continue to support an indefinite useful
life assessment for the asset. Such assets are tested for impairment in accordance with the policy
below.
IMPAIRMENT OF TANGIBLE AND INTANGIBLE ASSETS EXCLUDING GOODWILL - At each
balance sheet date, the group reviews the carrying amounts of its tangible and intangible assets
to determine whether there is any indication that those assets have suffered an impairment
loss. If any such indication exists, the recoverable amount of the asset is estimated in order to
determine the extent of the impairment loss (if any). Where it is not possible to estimate the
recoverable amount of an individual asset, the group estimates the recoverable amount of the
cash-generating unit to which the asset belongs.
Intangible assets with indefinite useful lives and intangible assets not yet available for use are
tested for impairment annually, and whenever there is an indication that the asset may be
impaired.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing
value in use, the estimated future cash fl ows are discounted to their present value using a pre-tax
discount rate that refl ects current market assessments of the time value of money and the risks
specific to the asset.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than
its carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to
its recoverable amount. An impairment loss is recognised immediately in the profit and loss
statement.
Where an impairment loss subsequently reverses, the carrying amount of the asset (cashgenerating
unit) is increased to the revised estimate of its recoverable amount, but so that
the increased carrying amount does not exceed the carrying amount that would have been
determined had no impairment loss been recognised for the asset (cash-generating unit) in
prior years. A reversal of an impairment loss is recognised immediately in the profit and loss
statement.
ASSOCIATES - An associate is an entity over which the group has significant infl uence and that
is neither a subsidiary nor an interest in a joint venture. Significant infl uence is the power to
participate in the financial and operating policy decisions of the investee but is not control or
joint control over those policies.
The results and assets and liabilities of associates are incorporated in these financial statements
using the equity method of accounting. Under the equity method, investments in associates are
carried in the consolidated balance sheet at cost as adjusted for post-acquisition changes in the
group’s share of the net assets of the associate, less any impairment in the value of individual
investments. Losses of an associate in excess of the group’s interest in that associate (which
includes any long-term interests that, in substance, form part of the group’s net investment in the
associate) are not recognised, unless the group has incurred legal or constructive obligations or
made payments on behalf of the associate.
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