PHDT Annual Report 2015

Notes to the Financial Statements (Contd.)
difference between the net disposal proceeds and the
carrying amount of the asset) is included in the Income
Statement in the year the asset is derecognised.
2.2.5 Impairment of Non Financial Assets
At each reporting date, Property, Plant and Equipment
and inventory are reviewed to determine whether there
is any indication that those assets have suffered an
impairment loss. If there is an indication of possible
impairment, the recoverable amount of any affected asset
(or group of related assets) is estimated and compared
with its carrying amount. If estimated recoverable amount
is lower, the carrying amount is reduced to its estimated
recoverable amount, and an impairment loss is recognised
immediately in Statement of Income and Expenditure.
If an impairment loss subsequently reverses, the carrying
amount of the asset (or group of related assets) is
increased to the revised estimate of its recoverable
amount (selling price less costs to complete and sell, in
the case of inventories), but not in excess of the amount
that would have been determined had no impairment loss
been recognized for the asset (group of related assets) in
prior years. A reversal of an impairment loss is recognized
immediately in Statement of Income and Expenditure.
2.2.6 Financial Assets
Financial assets within the scope of Section 11 of the
Sri Lanka Accounting Standards for Small and Medium
Sized Enterprises have been recorded at transaction price
unless the transaction is a financing transaction. Financing
transactions are recorded at present value of future cash
payments discounted at the market rate for a similar debt
instruments.
The financial assets include cash and short-term deposits,
Levy and other Receivables.
a) Cash and Cash Equivalents
Cash and cash equivalents are defined as cash in hand,
demand deposits and short term highly liquid investments,
readily convertible to known amounts of cash and subject
to insignificant risk of changes in value.
For the purpose of Cash Flow Statement, cash and cash
equivalents consist of cash in hand. Investments with
short maturities i.e. three months or less from the date of
acquisition are also treated as cash equivalents.
b) Levy and Other Receivables
Levy and Other Receivables are stated at the amounts
they are estimated to realise.
At the end of each reporting period, the carrying
amounts of Levy and other receivables are reviewed to
determine whether there is any objective evidence that the
amounts are not recoverable. If so, an impairment loss
is recognized immediately in Statement of Income and
Expenditure.
c) Investments
Investments include investments in Fixed Deposits and
Treasury Bills and stated at amotized cost.
2.2.7 Financial Liabilities
Financial liabilities within the scope of Section 11 of the
Sri Lanka Accounting Standards for Small and Medium
Sized Enterprises have been recorded at transaction price
unless the transaction is a financing transaction. Financing
transactions are recorded at present value of future cash
payments discounted at the market rate for a similar debt
instruments
The financial liabilities include other payables and Accruals
and finance leases.
a) Other Payables and Accruals
Other Payables and Accruals are stated at their cost
b) Finance Leases
Finance leases, which transfer to the Organization
substantially all the risks and benefits incidental to
ownership of the leased item, are capitalised at the
inception of the lease at the fair value of the leased
property or, if lower, at the present value of the minimum
lease payments. Lease payments are apportioned
between the finance charges and reduction of the lease
liability so as to achieve a constant rate of interest on
the remaining balance of the liability. Finance charges are
charged to the Statement of Income and Expenditure.
Capitalised leased assets are depreciated over the
shorter of the estimated useful life of the asset and the
lease term, if there is no reasonable certainty that the
Organization will obtain ownership by the end of the
lease term. The depreciation policy for depreciable leased
assets is consistent with that for depreciable asset that
are owned as described in 2.2.4 above.
Pg.
80 Plantation Human Development Trust Annual Report 2015