Course Final Project Essay

1870 Words Jun 8th, 2014 8 Pages
Summary of significant accounting policies

The company is engaged in the manufacture, sale and servicing of branded electronic appliances in India and other parts of the world. The financial statements are prepared under the historical cost convention on an accrual basis, in accordance with the generally accepted accounting principles

(a) Change in accounting policy

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year, except for the change in accounting policy explained below.

Up to the year ended the Company was recognizing dividend declared by subsidiary companies after the reporting date in the current year’s statement of profit and loss if such dividend pertained to
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(e) Intangible assets

Intangible assets acquired separately are measured at cost less amortization and impairment losses, if any. Intangible assets are amortized on a straight line basis over the estimated useful economic life. The company uses a rebuttable presumption that the useful life of an intangible asset will not exceed ten years from the date when the asset is available for use. If the persuasive evidence exists to the affect that useful life of an intangible asset exceeds ten years, the company amortizes the intangible asset over the best estimate of its useful life.

Research costs are expensed as incurred. Development expenditure incurred on an individual project is recognized as an intangible asset when the company can sufficiently demonstrate technical practicality and availability of funds to complete the project and expects that the asset will generate future economic benefits.

(f) Leases

Where the company is lessee

Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognized as finance costs in the statement of profit and loss. A leased asset is depreciated on a straight-line basis over the useful life of the asset or the useful life whichever is lower. However, if there is no reasonable certainty that the company will obtain the

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