Annual Report 2012 - Lahore Stock Exchange

Financial Notes- ProvisionsProvisions are recognized when the Company has a present legal or constructive obligation as aresult of past events and it is probable that an outflow of resources embodying economic benefitswill be required to settle the obligation and a reliable estimate of the obligation can be made.However, provisions are reviewed at each balance sheet date and adjusted to reflect current bestestimate.- ImpairmentThe carrying amount of the Company's assets are reviewed at each balance sheet date todetermine whether there is any indication of impairment loss. If any such indication exists, theasset's recoverable amount is estimated in order to determine the extent of the impairment loss,if any.An impairment loss is recognized whenever the carrying amount of an asset or its cashgenerating unit exceeds its recoverable amount. All impairment losses are recognized in theprofit and loss. Individually significant financial assets are tested for impairment on individualbasis. An impairment loss in respect of available-for-sale financial assets is calculated by thereference to its current fair value. Any cumulative loss in respect of an available-for-salefinancial asset recognised previously in equity is transferred to profit and loss.Impairment losses are reversed when there is an indication that the impairment may no longerexist and there has been a change in the estimate used to determine the recoverable amount. Animpairment loss is reversed only to the extent that the asset's carrying amount does not exceedthe carrying amount that would have been determined, net of depreciation and amortization, ifno impairment loss had been charged.For available-for-sale financial assets that are equity securities, the reversal is recognised directlyin equity.4Initial application of new standards, interpretations or amendments to existingstandards and forthcoming requirements4.1Standards, amendments or interpretations which became effective during theDuring the year certain amendments to standards or new interpretations became effective,however, the amendments or interpretation did not have any material effect on the financialstatements of the Company.4.2New / revised accounting standards, amendments to published accountingstandards, and interpretations that are not yet effectiveThe following standards, amendments and interpretations of approved accounting standards willbe effective for accounting periods beginning on or after 01 July 2012:ANNUAL REPORT 2011-12 105