NSE Annual Reports - The Nigerian Stock Exchange

NOTES TO THE CONSOLIDATED AND SEPARATEFINANCIAL STATEMENTS (CONT’D)FOR THE YEAR ENDED 31 DECEMBER 2012(a)Under the Nigerian GAAP, the group recognized purchased software (an intangible asset) as part of propertyand equipment. Intangible assets have been separated from property and equipment in line with therequirements of IFRS.In addition, some balances relating to property, plant and equipment and intangible assets could not bephysically verified. In preparing the IFRS financial statement, the carrying amount of these items was writtenoff in accordance with the requirements of IFRS.Furthermore, assets whose balances could not be substantiated were reclassified to other assets and testedfor impairment by comparing the carrying amount with the recoverable amount. The carrying amount ofthese assets exceeded their recoverable amounts and the assets were fully impaired and written down totheir recoverable amounts (nil) in accordance with the requirements of IFRS. The additional depreciationcharge on the assets was reversed.The group, also opted to change the useful life of some of its property and equipment in order to align itsaccounting estimates for property and equipment with industry best practice. The residual value of motorvehicles was reviewed in line with the requirements of IAS 16 which stipulates that estimate of useful life andresidual value and the method of depreciation should be reviewed as a minimum at the end of eachreporting period. The net impact of these changes is summarized as follows:In thousands of nairaGroup31 Dec2011Group01 Jan2011Exchange31 Dec2011Exchange01 Jan2011Consolidated and separate statement of financial positionProperty and Equipment (PPE) GAAPAdditional depreciation from change in usefullife of the assetWrite- off of unsubstantiated PPEReclassification from PPE to Intangible assetsReduction in depreciation from review ofresidual value of motor vehicles5,135,812(309,536)(672,000)(585,469)91,8665,653,832(164,174)(711,791)(919,612)(43,742)2,493,715(309,475)(244,111)(585,469)91,8663,002,791(164,174)(244,111)(919,612)(43,630)Property and Equipment (PPE): IFRS3,660,6733,814,5131,446,5261,631,264In thousands of nairaConsolidated and separate statement of comprehensive incomeDepreciation (GAAP)Reversal of depreciation on impaired assetsAdditional depreciation from change inuseful life of assetsReduction in depreciation from reviewof residual value of motor vehiclesDepreciation (IFRS)876,800(87,634)59,276(47,611)800,831----712,745(1,920)-59,325-(47,611)-722,539 -67A N N U A L R E P O R T & A C C O U N T S 2 0 1 2