Annual Report 2012 - Lahore Stock Exchange

Financial Notesc) Intangible assetsThese are stated at cost less accumulated amortization and impairment losses, if any.Amortization is charged using the straight line method over assets estimated useful life at therates specified in note 17.1.6 after taking into account residual value, if any. The residual values,useful lives and amortization methods are reviewed and adjusted, if appropriate, at each balancesheet date.Amortization on additions is charged from the month the assets are put to use while noamortization is charged in the month in which the assets are disposed off.Gain and losses on disposal of such assets, if any, are included in the profit and loss account.d) Capital work-in-progress (CWIP)Capital work in progress is stated at cost including, where relevant, related financing costs lessimpairmentlosses, if any. These costs are transferred to fixed assets as and when assets are available foruse.5.3 ImpairmentFinancial assetsA financial asset is assessed at each reporting date to determine whether there is any objectiveevidence that it is impaired. A financial asset is considered to be impaired if objective evidenceindicates that one or more events have had a negative effect on the estimated future cash flowsof that asset.Non-financial assetsThe carrying amounts of non-financial assets other than inventories and deferred tax asset, areassessed at each reporting date to ascertain whether there is any indication of impairment. Ifany such indication exists then the asset’s recoverable amount is estimated. An impairment lossis recognized, as an expense in the profit and loss account, for the amount by which the asset’scarrying amount exceeds its recoverable amount. The recoverable amount is the higher of anasset’s fair value less cost to sell and value in use. Value in use is ascertained throughdiscounting of the estimated future cash flows using a discount rate that reflects current marketassessments of the time value of money and the risk specific to the assets. For the purpose ofassessing impairment, assets are grouped at the lowest levels for which there are separatelyidentifiable cash flows (cash-generating units).An impairment loss is reversed if there has been a change in the estimates used to determine therecoverable amount. An impairment loss is reversed only to the extent that the asset’s carryingamount does not exceed the carrying amount that would have been determined, net ofdepreciation or amortization, if no impairment loss had been recognized.110LAHORE STOCK EXCHANGE