Annual Report 2007 - Investing In Africa

Annual Report 2007
Accounting
Policies (continued)
2.14 Property, Plant and Equipment
All 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 asset's
carrying amount or are 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 of
the item can be measured reliably. All other
repairs and maintenance are charged to the
income statement during the financial period in
which they are incurred.
Land is not depreciated. Depreciation on other
assets is calculated using the straight-line
method to allocate their cost to their residual
values over their estimated useful lives, as follows:
Leasehold improvements 25 years, or over
the period of the lease if less than 25 years
Equipment and motor vehicles 3 - 8 years.
The assets' residual values and useful lives are
reviewed, and adjusted if appropriate, at each
balance sheet date.
Assets that are subject to amortisation are
reviewed for impairment whenever events or
changes in circumstances indicate that the
carrying amount may not be recoverable. An
asset's carrying amount is written down immediately
to its recoverable amount if the asset's
carrying amount is greater than its estimated
recoverable amount. The recoverable amount is
the higher of the asset's fair value less costs to
sell and value in use.
2.15 Cash and Cash Equivalents
For the purposes of the cash flow statement,
cash and cash equivalents comprise balances
with less than three month's maturity from date
of acquisition, including cash and non-restricted
balances with central banks, treasury bills and
other eligible bills, loans and advances to banks,
amounts due from other banks and short-term
government securities.
2.16 Provisions
Provisions for restructuring costs and legal
claims are recognised when the group has a
present legal or constructive obligation as a
result of past events; it is more likely than not
that an outflow of resources will be required to
settle the obligation; and the amount has been
reliably estimated.
Where there are a number of similar obligations,
the likelihood that an outflow will be required
in settlement is determined by considering the
class of obligations as a whole. A provision is
recognised even if the likelihood of an outflow
with respect to any one item included in the
same class of obligations may be small.
Provisions are measured at the present value of
the expenditures expected to be required to
settle the obligation using a pre-tax rate that
reflects current market assessments of the time
value of money and the risks specific to the
obligation. The increase in the provision due to
passage of time is recognised as interest
expense.
Gains and losses on disposal are determined by
comparing proceeds with carrying amount.
These are included in the income statement.
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