EDC 2014 SR (UPDATED)

EDC 2014 Performance Report
Cash and Cash Equivalents
Cash and cash equivalents in the consolidated statement of financial position comprise cash in
banks and on hand and short-term deposits with original maturities of three months or less from
dates of acquisition and that are subject to insignificant risk of changes in value.
Parts and Supplies Inventories
Inventories are valued at the lower of cost and net realizable value. Cost includes the invoice
amount, net of trade and cash discounts. Cost is calculated using the moving average method.
Net realizable value represents the current replacement cost.
Prepaid Expenses
Prepayments are expenses paid in advance and recorded as asset before these are utilized. This
account comprises prepaid expenses, creditable withholding tax, tax credit certificates and
advances to contractors. The prepaid expenses are apportioned over the period covered by the
payment and charged to the appropriate accounts in the consolidated statement of income when
incurred; creditable withholding tax are deducted from income tax payable on the same year the
revenue was recognized; and the advances to contractors are reclassified to the proper asset or
expense account and deducted from the contractor’s billings as specified on the provision of the
contract. Prepayments that are expected to be realized for a period of no more than 12 months
after the financial reporting period are classified as current asset; otherwise, these are classified as
other noncurrent asset.
Property, Plant and Equipment
Property, plant and equipment, except land, is stated at cost less accumulated depreciation,
amortization and impairment in value, if any. The initial cost of property, plant and equipment,
consists of its purchase price and any directly attributable costs of bringing the asset to its working
condition and location for its intended use and any estimated cost of dismantling and removing the
property, plant and equipment item and restoring the site on which it is located to the extent that
the Company had recognized the obligation to that cost. Such cost includes the cost of replacing
part of the property, plant and equipment if the recognition criteria are met. When significant
parts of property, plant and equipment are required to be replaced in intervals, the Company
recognizes such parts as individual assets with specific useful lives, depreciation and amortization.
All other repairs and maintenance costs are recognized in the consolidated statement of income as
incurred. Land is carried at cost less accumulated impairment losses, if any.
The income generated wholly and necessarily as a result of the process of bringing the asset into
the location and condition for its intended use (e.g., net proceeds from selling any items produced
while testing whether the asset is functioning properly) is credited to the cost of asset up to the
extent of cost of testing capitalized during the testing period. Any excess of net proceeds over
costs is recognized in profit or loss. When the incidental operations are not necessary to bring an
item to the location and condition necessary for it to be capable of operating in the manner
intended by management, the income and related expenses of incidental operations are not offset
against the cost of the asset but are recognized in profit or loss and included in their respective
classifications of income and expense.
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