Consolidated Profit And Loss Account (Page 10 of 48) in pdf

NOTES TO THE ACCOUNTS

(iii) Properties held for sale

Properties held for sale are classified under current assets and stated at the lower of cost and net

realisable value. Cost is determined by apportionment of the total development costs for that

development, including borrowing costs capitalised, attributable to unsold units. Net realisable

value is determined by management, based on prevailing market conditions.

The amount of any write down of or provision for properties held for sale is recognised as an

expense in the period the write down or loss occurs. The amount of any reversal of any write down

or provision arising from an increase in net realisable value is recognised in the profit and loss

account in the period in which the reversal occurs.

Depreciation of fixed assets

(i)

Investment properties

No depreciation is provided in respect of investment properties with an unexpired lease term of

more than 20 years since the valuation takes into account the state of each property at the date of

valuation. Investment properties held on leases with unexpired periods of 20 years or less are

depreciated over the remaining portion of the leases.

(ii) Other fixed assets

Depreciation is provided on a straight line basis on the cost of other fixed assets at rates determined

by the estimated useful lives of the assets of between 3 to 10 years.

Impairment of assets

The carrying amounts of assets, other than investment properties carried at revalued amounts, are

reviewed at each balance sheet date to determine whether there is any indication of impairment. If any

such indication exists, the recoverable amount is estimated. An impairment loss is recognised whenever

the carrying amount exceeds the recoverable amount. Impairment losses are recognised as an expense in

the profit and loss account.

(i)

Recoverable amount

The recoverable amount of an asset is the greater of its net selling price and value in use.

(ii) Reversals of impairment losses

In respect of assets other than goodwill, an impairment loss is reversed if there has been a change

in the estimates used to determine the recoverable amount. An impairment loss in respect of

goodwill is reversed only if the loss was caused by a specific external event of an exceptional nature

that is not expected to recur, and the increase in recoverable amount relates clearly to the reversal

of the effect of that specific event.

Wheelock and Company Limited Annual Report 2004/05

Consolidated Profit And Loss Account Page 10