Year ended 31 March 2016
NOTES TO THE
FINANCIAL STATEMENTS
SINGAPORE MYANMAR INVESTCO LIMITED
| Annual Report 2016
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2.
Basis of preparation (cont’d)
2C. Basis of consolidation (cont’d)
Changes in the group’s ownership interest in a subsidiary that do not result in the loss of control are
accounted for within equity as transactions with owners in their capacity as owners. The carrying amounts
of the group’s and non-controlling interests are adjusted to reflect the changes in their relative interests in
the subsidiary. When the group loses control of a subsidiary it derecognises the assets and liabilities and
related equity components of the former subsidiary. Any gain or loss is recognised in profit or loss. Any
investment retained in the former subsidiary is measured at fair value at the date when control is lost and is
subsequently accounted as available-for-sale financial assets in accordance with FRS 39.
The company’s separate financial statements have been prepared on the same basis, and as permitted
by the Companies Act, Chapter 50, the company’s separate statement of profit or loss and other
comprehensive income is not presented.
2D. Significant judgements, assumptions and estimation uncertainties
The preparation of financial statements in conformity with generally accepted accounting principles
requires the management to make estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during the reporting year. Actual results could differ
from those estimates. The estimates and assumptions are reviewed on an ongoing basis. Apart from those
involving estimations, management has made judgements in the process of applying the entity’s accounting
policies. The areas requiring management’s most difficult, subjective or complex judgements, or areas
where assumptions and estimates are significant to the financial statements, are disclosed at the end of this
footnote, where applicable.
The critical judgements made in the process of applying the accounting policies that have the most
significant effect on the amounts recognised in the financial statements and the key assumptions concerning
the future, and other key sources of estimation uncertainty at the end of the reporting year, that have a
significant risk of causing a material adjustment to the carrying amounts of assets and liabilities currently
or within the next reporting year are discussed below. These estimates and assumptions are periodically
monitored to ensure they incorporate all relevant information available at the date when financial statements
are prepared. However, this does not prevent actual figures differing from estimates.
Useful lives of property, plant and equipment:
Included in property, plant and equipment of the Group are leasehold improvements with a carrying amount
of US$660,161 as at end of the reporting year. Management has depreciated the leasehold improvements
on a straight-line basis over their estimated useful lives of 3 years. The terms of the lease for the Group’s
premise however is less than 3 years. Management has assumed the Group will be able to renew the terms
of its lease on its expiry and hence the estimated useful lives for leasehold improvements of 3 years is
appropriate. In the event the Group is not able to renew the terms of its lease and the Group vacates the
relevant premise, the carrying value of leasehold improvements related to the vacated premise would have
to be fully impaired.
Allowance for doubtful trade accounts:
An allowance is made for doubtful trade accounts for estimated losses resulting from the subsequent
inability of the customers to make required payments. If the financial conditions of the customers were to
deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be
required in future periods. To the extent that it is feasible impairment and uncollectibility is determined
individually for each item. In cases where that process is not feasible, a collective evaluation of impairment
is performed. At the end of the reporting year, the trade receivables carrying amount approximates the fair
value and the carrying amounts might change materially within the next reporting year but these changes
may not arise from assumptions or other sources of estimation uncertainty at the end of the reporting year.
The carrying amount is disclosed in the note on trade and other receivables.
