notes to the financial statements for the year ... - Investing In Africa

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2009 (continued)1. SIGNIFICANT ACCOUNTING POLICIES (continued)(d)Taxes (continued)Deferred Income Tax assets are recognised for all deductible temporary differences, carry forward of unused taxcredits and unused tax losses, to the extent that it is probable that taxable profi t will be available against which thedeductible temporary differences, and the carry forward of unused tax credits and unused tax losses can beutilised except:(e)• where the deferred tax asset relating to the deductible temporary difference arises from the initial recognitionof an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affectsneither the accounting profi t nor taxable profi t or loss; and,• in respect of deductible temporary differences associated with investments in subsidiaries, associates andinterests in joint ventures, deferred tax assets are recognised only to the extent that it is probable that thetemporary differences will reverse in the foreseeable future and taxable profi t will be available against which thetemporary differences can be utilised.The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent thatit is no longer probable that suffi cient taxable profi t will be available to allow all or part of the deferred tax asset tobe utilised. Unrecognised deferred tax assets are reassessed at each balance sheet date and are recognised to theextent that it has become probable that future taxable profi t will allow the deferred tax asset to be recovered.Deferred tax assets and deferred income tax liabilities are offset, if a legally enforceable right exists to set off currenttax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxationauthority.Value Added TaxRevenues, expenses and assets are recognised net of the amount of value added tax except where the value addedtax incurred on a purchase of assets or services is not recoverable from the tax authorities, in which case the valueadded tax is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; andreceivables and payables that are stated with the amount of value added tax included.The net amount of value added tax recoverable from, or payable to, the tax authorities is included as part ofaccounts receivables or payables in the balance sheet.Property, plant and equipmentProperty, plant and equipment are stated at historical cost and/or professionally revalued amounts less accumulateddepreciation and impairment losses. An item of property, plant and equipment is derecognised upon disposal orwhen no future economic benefi ts are expected from its use or disposal. Any gain or loss arising on derecognisingof the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) isincluded in profi t or loss in the year the asset is derecognised.East African Portland Cement Co. Ltd Annual Report and Financial Statements FY 2008/200937The Company’s policy is to professionally revalue property, plant and equipment at least once every fi ve years. Thelast revaluation was carried out as at 30 June 2006.