SINGAPORE WINDSOR HOLDINGS LIMITED
| Annual Report 2015
46
Year ended 31 March 2015
NOTES TO THE
FINANCIAL STATEMENTS
2.
Summary of significant accounting policies (cont’d)
Inventories
Inventories are measured at the lower of cost (first in first out method) and net realisable value. Net realisable value
is the estimated selling price in the ordinary course of business less the estimated costs of completion and the
estimated costs necessary to make the sale. A write down on cost is made where the cost is not recoverable or if
the selling prices have declined. Cost includes all costs of purchase, costs of conversion and other costs incurred in
bringing the inventories to their present location and condition. In the case of manufactured inventories and work in
progress, cost includes an appropriate share of overheads based on normal operating capacity.
Financial liabilities
Initial recognition, measurement and derecognition:
A financial liability is recognised on the statement of financial position when, and only when, the entity becomes a
party to the contractual provisions of the instrument and it is derecognised when the obligation specified in the
contract is discharged or cancelled or expires. The initial recognition of financial liability is at fair value normally
represented by the transaction price. The transaction price for financial liability not classified at fair value through
profit or loss includes the transaction costs that are directly attributable to the acquisition or issue of the financial
liability. Transaction costs incurred on the acquisition or issue of financial liability classified at fair value through
profit or loss are expensed immediately. The transactions are recorded at the trade date. Financial liabilities
including bank and other borrowings are classified as current liabilities unless there is an unconditional right to
defer settlement of the liability for at least 12 months after the end of the reporting year.
Subsequent measurement:
Subsequent measurement based on the classification of the financial liabilities in one of the following two
categories under FRS 39 is as follows:
#1.
Liabilities at fair value through profit or loss: Liabilities are classified in this category when they are incurred
principally for the purpose of selling or repurchasing in the near term (trading liabilities) or are derivatives
(except for a derivative that is a designated and effective hedging instrument) or have been classified in this
category because the conditions are met to use the “fair value option” and it is used. Financial guarantee
contracts if significant are initially recognised at fair value and are subsequently measured at the greater of
(a) the amount determined in accordance with FRS 37 and (b) the amount initially recognised less, where
appropriate, cumulative amortisation recognised in accordance with FRS 18. All changes in fair value relating
to liabilities at fair value through profit or loss are charged to profit or loss as incurred.
#2.
Other financial liabilities: All liabilities, which have not been classified as in the previous category fall into this
residual category. These liabilities are carried at amortised cost using the effective interest method. Trade
and other payables and borrowings are usually classified in this category. Items classified within current trade
and other payables are not usually re-measured, as the obligation is usually known with a high degree of
certainty and settlement is short-term.
Assets classified as held for sale
Identifiable assets, liabilities and contingent liabilities and any disposal groups are classified as held for sale if
their carrying amount is to be recovered principally through a sale transaction rather than through continuing use.
The sale is expected to qualify for recognition as a completed sale within one year from the date of classification,
except as permitted by FRS 105 in certain circumstances. It can include a subsidiary acquired exclusively with a
view to resale. Assets that meet the criteria to be classified as held for sale are measured at the lower of carrying
amount and fair value less costs of disposal and are presented separately on the face of the statement of financial
position. Once an asset is classified as held for sale or included in a group of assets held for sale no further
depreciation or amortisation is recorded. Impairment losses on initial classification of the balances as held for sale
are included in profit or loss, even when there is a revaluation. The same applies to gains and losses on subsequent
remeasurement.
