Introductory Document - Colombo Stock Exchange

3.2.2 Inventories (Cont’d)RAMBODA FALLS (PVT) LIMITEDNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 MARCH, 2011The cost of inventories includes expenditure incurred in acquiring the inventories and other costsincurred in bringing them to their existing location and condition. Accordingly, the costs of inventoriesare accounted as follows:FoodBeverage & bar stockCutlery & linenAt actual cost on a weighted average basisAt actual costAt actual cost on a weighted average basis3.2.3 Trade & Other ReceivablesTrade and other receivables are stated at their cost less impairment losses. (See Accounting Policy3.2.5)3.2.4 Cash & cash equivalentsCash & cash equivalents are defined as cash in hand, demand deposits and short-term highly liquidinvestments readily convertible to known amounts of cash and subject to insignificant risks of change invalue. For the purpose of cash flow statement, cash and cash equivalent comprise of cash in hand anddeposits at banks net of outstanding bank overdrafts.3.2.5 Impairmenta. RecognitionThe carrying value of the company’s assets other than inventories (refer accounting policy 3.2.2), arereviewed at each balance sheet date to determine whether there is any indication of impairment.If any such indication exists, the asset’s recoverable amount is estimated (see below). An impairmentloss is recognized whenever the carrying amount of asset or its cash-generating unit exceeds itsrecoverable amount. Impairment losses are recognized in the income statement.For the assets that have indefinite useful life and intangible assets that are not yet available for use, therecoverable amount is estimated at each balance sheet date.b. Calculation of recoverable amountThe recoverable amount is the greater of their net selling and value in use. In assessing value in use, theestimated future cash flows are discounted to their present value using discount rate that reflects thecurrent market assessment of their time value of money and the risk specific to the asset. For an assetthat does not generate largely independent cash inflows, the recoverable amount is determined for thecash-generating unit to which the asset belongs.1145 Ramboda Falls Limited – Introductory Document