Annual Report 2012 - e-KONG Group Limited

e-KONG GROUP LIMITEDNotes to the Consolidated Financial Statements (continued)For the year ended 31 December 20122. PRINCIPAL ACCOUNTING POLICIES (continued)Impairment of non-financial assets, other than goodwillAt the end of each reporting period, the Group reviews the carrying amounts of its property, plant and equipment,intangible assets and investments in subsidiaries to determine whether there are any indications that such assetshave suffered impairment losses or that impairment losses previously recognised no longer exist or may be reduced.If the recoverable amount of an asset is estimated to be less than its carrying amount, the latter is reduced to itsrecoverable amount. Impairment losses are recognised as an expense immediately.Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revisedestimate of its recoverable amount to the extent that the increased carrying amount does not exceed the carryingamount that would have been determined had no impairment loss been recognised for the asset in prior years.A reversal of an impairment loss is recognised as income immediately.InventoriesInventory is stated at the lower of cost and net realisable value. Cost is calculated using the first in, first outmethod. Net realisable value represents the estimated selling price in the ordinary course of business less theestimated costs necessary to make the sale.Revenue recognitionConsolidated revenue comprises revenue of the Company and its subsidiaries plus the Group’s share of revenuesof its jointly-controlled entities and excludes sales taxes and discounts.Revenue is recognised when it is probable that the economic benefits will flow to the Group and when the revenuecan be measured reliably.Income in respect of telecommunication services, insurance-related distribution services and consultancy servicesprovided to customers is recognised when the services are rendered.Interest income is accrued on a time proportion basis on the principal outstanding and at the effective interestrate applicable.44Annual Report 2012