omnia holdings annual report 2010 omnia holdings annu

80 OMNIA ANNUAL REPORT 2010 FINANCIAL STATEMENTS continued
NOTES TO THE GROUP FINANCIAL STATEMENTS continued
for the year ended 31 March 2010
probable that future economic benefits associated with the
item will flow to the Group and the cost of the item can be
measured reliably. The carrying amount of replaced parts is
derecognised. All other repairs and maintenance are charged to
the income statement during the financial period in which they
are incurred.
Borrowing costs incurred for the construction of any qualifying
assets are capitalised during the period of time that is required
to complete and prepare the assets for their intended use.
Borrowing costs relating to the construction of a plant were
capitalised. Other borrowing costs are expensed.
Freehold land is not depreciated. Other classes of property, plant
and equipment are stated at cost less accumulated depreciation
and any impairment losses. Where the carrying amount of an
asset is greater than its estimated recoverable amount, it is
written down immediately to its recoverable amount.
Depreciation is calculated to write off the cost of property, plant
and equipment, including assets under finance leases to their
residual value, over their estimated useful lives on a straight-line
basis. Improvements to leasehold property are depreciated over
the lesser of 50 years or the period of the lease. Expected
useful lives are as follows:
� Buildings 50 years
� Plant and machinery 4 – 20 years
� Furniture, vehicles and equipment 3 – 5 years
Annually, at the balance sheet date, an estimate is done of the
remaining useful lives and residual values of property, plant and
equipment. Adjustments are made prospectively to the
depreciation charge to reflect the change in the useful life or
residual value.
Gains and losses on disposal are determined by comparing
proceeds with the carrying amount and are included in other
operating income in the income statement.
1.3 Impairment of non-financial assets
Assets that have an indefinite useful life (for example, goodwill)
are not subject to amortisation. These assets are tested annually
for impairment and whenever events or changes in circumstances
indicate that the carrying amount may not be recoverable. Assets
that have a definite useful life and are subject to amortisation are
reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount may not be
recoverable. An impairment loss is recognised in the income
statement for the amount by which the asset’s carrying amount
exceeds its recoverable amount. The recoverable amount is the
higher of an asset’s fair value less costs to sell and value-in-use.
For the purpose of assessing impairment, assets are grouped at
the lowest levels for which there are separately identifiable cash
flows (cash-generating units).
At each reporting date an assessment is made whether there
is any indication that an impairment loss recognised in prior
periods for assets may no longer exist or may have decreased.
If any such indication exists, the recoverable amounts of those
assets are estimated. The increased carrying amount of the
asset attributable to a reversal of an impairment loss does
not exceed the carrying amount that would have been
determined had no impairment loss been recognised for the
asset in prior years. A reversal of an impairment loss of
assets carried at cost less accumulated depreciation or
amortisation, other than goodwill, is recognised immediately in
the income statement.
1.4 Revenue recognition
Revenue comprises the fair value of the consideration received
or receivable for the sale of goods and services in the ordinary
course of the Group’s activities. Revenue is shown net of
value-added tax, returns, rebates and discounts and after
eliminating sales within the Group.
The Group recognises revenue when the amount of revenue can
be reliably measured and it is probable that future economic
benefits will flow to the entity and when specific criteria have
been met as described below. The amount of revenue is not
considered to be reliably measurable until significant
contingencies relating to the sale have been resolved. The
Group bases its estimates on historical results, taking into
consideration the type of customer, the type of transaction and
the specifics of each arrangement.
Revenue from the sale of goods is recognised when all of the
following conditions have been satisfied:
� the Group has transferred to the buyer the significant risks
and rewards of ownership of the goods;
� the Group retains neither continuing managerial involvement
to the degree usually associated with ownership nor
effective control over the goods sold;
� the amount of revenue can be measured reliably;
� it is probable that the economic benefits associated with the
transactions will flow to the Group; and
� the costs incurred or to be incurred in respect of the
transaction can be measured reliably.
Revenue from the provision of services is recognised in the
accounting period in which the services are rendered, by
reference to completion of the specific transaction assessed on
the basis of the actual service provided as a proportion of the
total services to be provided, when the following conditions
have been satisfied:
� the amount of revenue can be measured reliably;
� it is probable that the economic benefits associated with the
transactions will flow to the Group;
� the stage of completion of the transaction at the balance
sheet date can be measured reliably; and
� the costs incurred for the transaction and the costs to
complete the transaction can be measured reliably.
Other revenue earned by the Group is recognised on the
following basis:
� dividend income: when the Group’s right to receive payment
is established.
� interest income: based on the effective interest rate
method.