DAWOOD LAWRENCEPUR LIMITED - Lahore Stock Exchange

3.2 Intangible assets3.2.1 SoftwaresAcquired computer software licenses are capitalized on the basis of the costs incurred to acquire and bring to usethe specific software. Software is stated at cost less accumulated amortization and accumulated impairmentlosses, if any. These are amortized using the 'Straight Line Method' from the month the software is available foruse upto the month of its disposal at the rate mentioned in note 5.1. The residual values, useful lives andamortization method are reviewed and adjusted, if appropriate, at each balance sheet date. Refer note 5.2 inrespect of changes in accounting estimates with regard to the intangible assets.3.3 Financial instrumentsAll financial assets and liabilities are recognized at the time when the Company becomes a party to the contractualprovisions of the instrument. Financial assets include trade debts, other receivables, loans, advances and deposits. Theseare recognized initially at cost plus directly attributable transaction costs, if any, and subsequently measured at fair valueor amortized cost using effective interest rate method as the case may be less provision for impairment, if any. Exchangegains and losses arising in respect financial assets or liabilities in foreign currency are added to the respective carryingamounts.3.4 InvestmentsThe Company recognises an investment when it becomes a party to the contractual provisions of the instrument. Aregular way purchase of financial assets is recognised using trade date accounting. From this date any gains and lossesarising from changes in fair value of the financial assets or financial liabilities are recorded. Financial liabilities are notrecognised unless one of the parties has performed its part of the contract or the contract is a derivative contract.3.4.1 Investments in subsidiaries and associated companiesInvestments, in subsidiaries where control exist, and associates where significant influence can be established areinitially stated at cost. Subsequently, the recoverable amount is estimated to determine the extent of impairmentlosses, if any, and carrying amounts are adjusted accordingly. Impairment losses are recognized as expense inthe profit and loss account. Where impairment losses subsequently reverse, the carrying amounts of theinvestments are increased to the revised recoverable amounts but limited to the extent of initial cost ofinvestments. A reversal of impairment loss is recognized in the profit and loss account adjusted for impairment,if any, in the recoverable amounts of such investments.3.4.2 Investments available for saleInvestments ‘available for sale’ are initially recognized at fair value, plus attributable transactions cost.Subsequent to initial recognition these are measured at fair value. Gains or losses on available-for-saleinvestments resulting from changes in fair value are recognized directly in equity until the investments are sold ordisposed off, or until the investments are determined to be impaired, at that time cumulative gain or losspreviously reported in the equity is included in current year's profit and loss account.All other investments in unquoted securities are stated at cost, less provision for impairment, if any.3.4.3 Held-to-maturity investmentsHeld-to-maturity investments are financial assets with fixed or determinable payments and fixed maturities thatthe management has the positive intention and ability to hold to maturity. These are recorded at amortized costusing the effective interest rate method, less any amount written off to reflect impairment.3.4.4 Financial assets at fair value through profit or lossAn instrument is classified as ‘fair value through profit or loss’ if it is held for trading or is designated as suchupon initial recognition. Financial instruments are designated at fair value through profit or loss if the Companymanages such investments and makes purchase and sales decisions based on their fair value. Upon initialrecognition, attributable transaction costs are recognized in the profit and loss account when incurred. Financialinstruments at fair value through profit or loss are measured at fair value, and changes therein are recognized inthe profit and loss account. Purchases and sales of investments are accounted for at trade date, i.e., the date thatthe Company commits itself to purchase or sell the investment.