EAPCC_Annual_Report_.. - Investing In Africa

2010/2011
EAST AFRICAN PORTLAND CEMENT COMPANY LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 30 JUNE 2011
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
(f)
Intangible assets
Intangible assets acquired separately are measured on initial recognition at cost. Subsequently, amortisation
and accumulated impairment losses are netted from the cost. Expenditure on internally generated
intangible assets, excluding capitalised development costs, is reflected in profit or loss in the year in
which it is incurred.
Intangible assets with finite lives are amortised on a straight line basis over their useful economic lives
from the date they are available for use, up to a maximum of three years. Intangible assets are assessed
for impairment whenever there is an indication that an intangible asset may be impaired.
The amortisation period and the amortisation method for an intangible asset with a 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 are treated as changes in accounting estimates. The amortisation
expense on intangible assets with finite lives is recognised in profit or loss in the expense category
consistent with the function of the intangible asset. Periodic software maintenance costs are recognised
as an expense when incurred.
Gains or losses arising from derecognising of an intangible asset are measured as the difference between
the net disposal proceeds and the carrying amount of the asset and are recognised in profit or loss when
the asset is derecognised.
(g) Leasehold land
Payments to acquire interests in leasehold land are treated as prepaid operating leases. They are stated
at historical cost and are amortised over the term of the related lease.
(h) Investment properties
Investment properties are measured initially at cost, including transaction costs, and excluding 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 statement of comprehensive
income in the year in which they arise.
Investment properties are derecognised when either they have been disposed of or when the investment
property is permanently withdrawn from use and no future economic benefit is expected from its disposal.
Any gains or losses on the retirement or disposal of an investment property are recognised in profit
or loss in the year of retirement or disposal.
The company’s policy is to obtain valuation of investment properties by independent professional valuers
at least once every three years. The last valuation was carried out as at 30 June 2009.
46
EAST AFRICAN PORTLAND CEMENT COMPANY LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS 2010/2011