Annual Report
2015
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DAYANG ENTERPRISE HOLDINGS BHD
(712243-U)
81
2.
Significant accounting policies (cont’d)
(f) Inventories
Inventories are measured at the lower of cost and net realisable value.
Cost of inventories is measured based on the weighted average cost formula, and includes
expenditure incurred in acquiring the inventories, production or conversion costs and other costs
incurred in bringing them to their existing location and condition.
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.
(g) Cash and cash equivalents
Cash and cash equivalents consist of cash on hand, balances and deposits with banks and highly
liquid investments which have an insignificant risk of changes in value with original maturities of
three months or less, and are used by the Group or the Company in the management of their short-
term commitments. For the purpose of the statement of cash flows, cash and cash equivalents are
presented net of bank overdrafts and pledged deposits.
(h) Impairment
(i) Financial assets
All financial assets (except for financial assets categorised as fair value through profit or loss
and investments in subsidiaries and associates) are assessed at each reporting date whether
there is any objective evidence of impairment as a result of one or more events having an
impact on the estimated future cash flows of the asset. Losses expected as a result of future
events, no matter how likely, are not recognised. For an investment in an equity instrument,
a significant or prolonged decline in the fair value below its cost is an objective evidence of
impairment. If any such objective evidence exists, then the impairment loss of financial asset is
estimated.
An impairment loss in respect of loans and receivables and held-to-maturity investments is
recognised in profit or loss and is measured as the difference between the asset’s carrying
amount and the present value of estimated future cash flows discounted at the asset’s original
effective interest rate. The carrying amount of the asset is reduced through the use of an
allowance account.
An impairment loss in respect of available-for-sale financial assets is recognised in profit
or loss and is measured as the difference between the asset’s acquisition cost (net of any
principal repayment and amortisation) and the asset’s current fair value, less any impairment
loss previously recognised. Where a decline in the fair value of an available-for-sale financial
asset has been recognised in the other comprehensive income, the cumulative loss in other
comprehensive income is reclassified from equity and recognised to profit or loss.
An impairment loss in respect of unquoted equity instrument that is carried at cost is recognised
in profit or loss and is measured as the difference between the financial asset’s carrying amount
and the present value of estimated future cash flows discounted at the current market rate of
return for a similar financial asset.
Impairment losses recognised in profit or loss for an investment in an equity instrument is not
reversed through profit or loss.
Notes to the
Financial Statements
(cont’d)
