Financial Statements - Hemas Holdings, Ltd

Hemas Holdings PLC - Annual Report 2007 - 2008Notes to the Financial Statementsvaluation model is used. These calculations are corroboratedby valuation multiples, quoted share prices for publiclytraded subsidiaries or other available fair value indicators.Impairment losses of continuing operations are recognised inthe Income Statement in those expense categories consistentwith the function of the impaired asset, except for propertypreviously revalued where the revaluation was taken toequity. In this case the impairment is also recognised inequity up to the amount of any previous revaluation.For assets excluding goodwill, an assessment is made at eachreporting date as to whether there is any indication thatpreviously recognised impairment losses may no longer existor may have decreased. If such indication exists, the Groupmakes an estimate of recoverable amount. A previouslyrecognised impairment loss is reversed only if there has beena change in the estimates used to determine the asset'srecoverable amount since the last impairment loss wasrecognised. If that is the case the carrying amount of theasset is increased to its recoverable amount. That increasedamount cannot exceed the carrying amount that would havebeen determined, net of depreciation, had no impairmentloss been recognised for the asset in prior years. Suchreversal is recognised in the Income Statement unless theasset is carried at revalued amount, in which case thereversal is treated as a revaluation increase. Impairmentlosses recognised in relation to goodwill are not reversed forsubsequent increases in its recoverable amount.The following criteria are also applied in assessingimpairment of specific assets:GoodwillGoodwill is reviewed for impairment, annually or morefrequently if events or changes in circumstances indicate thatthe carrying value may be impaired.Impairment is determined for goodwill by assessing therecoverable amount of the cash-generating unit (or group ofcash-generating units), to which the goodwill relates. Wherethe recoverable amount of the cash-generating unit (orgroup of cash-generating units) is less than the carryingamount of the cash-generating unit (group of cashgeneratingunits) to which goodwill has been allocated, animpairment loss is recognised. Impairment losses relating toGoodwill cannot be reversed in future periods. The Groupperforms its annual impairment test of goodwill as at 31 March.Intangible AssetsIntangible assets with indefinite useful lives are tested forimpairment annually either individually or at the cashgenerating unit level, as appropriate.AssociatesAfter application of the equity method, the Groupdetermines whether it is necessary to recognise an additionalimpairment loss of the Group's investment in its associates.The Group determines at each Balance Sheet date whetherthere is any objective evidence that the investment inassociate is impaired. If this is the case the Group calculatesthe amount of impairment as being the difference betweenthe fair value of the associate and the acquisition cost andrecognises the amount in the Income Statement.2.3.16 Income StatementRevenue RecognitionRevenue is recognised to the extent that it is probable thatthe economic benefits will flow to the Company and therevenue and associated costs incurred or to be incurred canbe reliably measured. Revenue is measured at the fair valueof the consideration received or receivable net of tradediscounts, value added taxes, and other sales taxes and aftereliminating intra-group sales. The following specific criteriaare used for the purpose of recognition of revenue.a) Sale of GoodsRevenue from sale of goods is recognised when thesignificant risks and rewards of ownership of the goods havepassed to buyer; with the Group retaining neither continuingmanagerial involvement to the degree usually associatedwith ownership, nor effective control over the goods sold.b) Rendering of ServicesRevenue from rendering of services is recognised in theaccounting period in which the services are rendered orperformed.c) Energy SuppliedRevenue from energy supplied is recognised, upon deliveryof energy to Ceylon Electricity Board and will be adjusted forcapacity charge for Minimum Guaranteed Energy Amount(MGEA) at the end of the calendar year if there has been acurtailment. (Delivery of electrical energy shall be completedwhen electrical energy meets the specifications as set out inPower Purchase Agreement (PPA) received at the meteringpoint.)d) Apartment and Food and Beverages SalesApartment revenue is recognised on the rooms occupied ona daily basis, and food and beverages sales are accounted forat the time of sales.e) Turnover Based TaxesTurnover based taxes include Value Added Tax, EconomicService Charge and Turnover Tax, which is payable toProvincial Council in respect of trading activities and66