Advanced Computer Software Group plc Annual report 2013

Notes to the consolidatedfinancial statements continued3 Significant accounting policies continuedCritical accounting estimates and judgements continuedInventoriesThe trading subsidiaries within the Group review the net realisable value of, and demand for, their inventory on aregular basis to provide assurance that it is stated at the lower of cost and net realisable value. Factors that couldimpact estimated demand and selling prices include the timing and success of future technological innovations,competitor activities, supplier prices and economic trends.Share-based paymentsThe fair value of share-based payments is estimated using the binomial valuation model as at the date of grant andusing certain assumptions. These assumptions are disclosed in note 25.ProvisionsA provision is recognised in the balance sheet when the Group has a present legal or constructive obligation as aresult of a past event, that can be reliably measured and it is probable that an outflow of economic benefits will berequired to settle the obligation. In arriving at estimates for provisions, judgements are made, in particular with regardto timing and amount. Calculations are based on anticipated future cashflows relating to the relevant event, whichare estimated by management and where appropriate supported by the use of external advisers.TaxationThe Group is subject to UK corporate taxation and judgement is required in determining the provision for incomeand deferred taxation. The Group recognises taxation assets and liabilities based upon estimates and assessmentsof many factors including past experience, advice received on the relevant taxation legislation and judgementsabout the outcome of future events. To the extent that the final outcome of these matters is different from the amountsrecorded, such differences will impact on the taxation charge made in the consolidated income statement in theperiod in which such determination is made.Standards, amendments and interpretations to existing standards not yet effectiveAt the date of approval of these financial statements, the following standards, interpretations and amendments wereissued but not yet mandatory for the Group and early adoption has not been applied:International Financial Reporting Standards (‘IFRS’)> > IFRS10 Consolidated Financial Statements> > IFRS11 Joint Arrangements> > IFRS12 Disclosure of Interests in Other Entities> > IFRS13 Fair Value MeasurementAmendments to existing standards> > Amendment to IAS1, Presentation of Other Comprehensive Income> > Amendments to IFRS7, Offsetting Financial Assets and LiabilitiesAll other amendments to existing standards are not yet endorsed by the EU at the date of approval of thesefinancial statements.It is considered that the above mentioned standards, amendments and interpretations will not have a significanteffect on the results or net assets of the Group.46Advanced Computer Software Group plcAnnual Report 2013