Annual Report 2011 - Goodbaby International Holdings Limited

NOTES TO FINANCIAL STATEMENTS
31 December 2011
3.2SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
Intangible assets (other than goodwill) (Continued)
Research and development costs
All research costs are charged to the statement of comprehensive income as incurred.
Expenditure incurred on projects to develop new products is capitalised and deferred only when
the Group can demonstrate the technical feasibility of completing the intangible asset so that it
will be available for use or sale, its intention to complete and its ability to use or sell the asset, how
the asset will generate future economic benefits, the availability of resources to complete the
project and the ability to measure reliably the expenditure during the development. Product
development expenditure which does not meet these criteria is expensed when incurred.
Deferred development costs are stated at cost less any impairment losses and are amortised using
the straight-line basis over the commercial lives of the underlying products, commencing from the
date when the products are put into commercial production.
Leases
Leases where substantially all the rewards and risks of ownership of assets remain with the lessor
are accounted for as operating leases. Where the Group is the lessor, assets leased by the Group
under operating leases are included in non-current assets, and rentals receivable under the
operating leases are credited to the statement of comprehensive income on the straight-line basis
over the lease terms. Where the Group is the lessee, rentals payable under operating leases net of
any incentives received from the lessor are charged to the statement of comprehensive income on
the straight-line basis over the lease terms.
Prepaid land lease payments under operating leases are initially stated at cost and subsequently
recognised on the straight-line basis over the lease terms.
Investments and other financial assets
Initial recognition and measurement
Financial assets within the scope of IAS 39 of the Group are classified as loans and receivables, as
appropriate. The Group determines the classification of its financial assets at initial recognition.
When financial assets are recognised initially, they are measured at fair value, plus transaction
costs, except in the case of financial assets recorded at fair value through profit or loss.
The Group’s financial assets include cash and cash equivalents, trade and notes receivables, other
receivables and amounts due from related parties.
gb international