Consolidated Profit And Loss Account Page 14

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NOTES TO THE ACCOUNTS
m)
Borrowing costs
Borrowing costs are expensed in the profit and loss account in the year in which they are incurred, except
to the extent that they are capitalised as being directly attributable to the acquisition, construction or
production of an asset which necessarily takes a substantial period of time to get ready for its intended
use or sale.
The capitalisation of borrowing costs as part of the cost of a qualifying asset commences when
expenditure for the asset is incurred, borrowing costs are being incurred and activities that are necessary
to prepare the asset for its intended use or sale are in progress. Capitalisation of borrowing costs is
suspended or ceases when substantially all the activities necessary to prepare the qualifying asset for its
intended use or sale are interrupted or complete.
n)
Related parties
For the purposes of these accounts, a party is considered to be related to the Group if the Group has the
ability, directly or indirectly, to control the party or exercise significant influence over the party in making
financial and operating decisions, or vice versa, or where the Group and the party are subject to common
control or common significant influence. Related parties may be individuals or other entities.
o)
Provisions
Provisions are recognised for liabilities of uncertain timing or amount when the Company or the Group
has a legal or constructive obligation arising as a result of a past event, it is probable that an outflow of
economic benefits will be required to settle the obligation and a reliable estimate can be made.
Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be
estimated reliably, the obligation is disclosed as a contingent liability, unless the probability of outflow of
economic benefits is remote. Possible obligations, whose existence will only be confirmed by the
occurrence or non-occurrence of one or more future events are also disclosed as contingent liabilities
unless the probability of outflow of economic benefits is remote.
p)
Segment reporting
A segment is a distinguishable component of the Group that is engaged in providing products or services
(business segment), or in providing products or services within a particular economic environment
(geographical segment), which is subject to risks and rewards that are different from those of other
segments.
In accordance with the Group’s internal financial reporting, the Group has chosen business segment
information as the primary reporting format and geographical segment information as the secondary
reporting format.
46
Wheelock and Company Limited Annual Report 2004/05

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