/ . 7 0
E U R O S P O R T S G L O B A L L I M I T E D
Notes to
the F iNaNci al statemeNts
3 1 ma r ch 2 0 1 5
2 .
Summa r y o f S i gn i f i c an t ac coun t i ng Po l i c i e s ( Con t ’ d )
inventories
Automobiles and watches held for sale are measured at the lower of cost (specific identification method) and net
realisable value. Inventories other than automobiles and watches are measured at the lower of cost (weighted average
method) and net realisable value. 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. A write down on cost is
made where the cost is not recoverable or if the selling prices have declined. Cost includes all costs of purchase, costs
of conversion and other costs incurred in bringing the inventories to their present location and condition. In the case
of manufactured inventories and work in progress, cost includes an appropriate share of overheads based on normal
operating capacity.
Financial assets
Initial recognition, measurement and derecognition:
A financial asset is recognised on the statement of financial position when, and only when, the entity becomes a
party to the contractual provisions of the instrument. The initial recognition of financial assets is at fair value normally
represented by the transaction price. The transaction price for financial asset not classified at fair value through profit
or loss includes the transaction costs that are directly attributable to the acquisition or issue of the financial asset.
Transaction costs incurred on the acquisition or issue of financial assets classified at fair value through profit or loss are
expensed immediately. The transactions are recorded at the trade date.
Irrespective of the legal form of the transactions performed, financial assets are derecognised when they pass the
“substance over form” based on the derecognition test prescribed by FRS 39 relating to the transfer of risks and
rewards of ownership and the transfer of control. Financial assets and financial liabilities are offset and the net amount
is reported in the statement of financial position if there is currently a legally enforceable right to offset the recognised
amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.
Subsequent measurement:
Subsequent measurement based on the classification of the financial assets in one of the following categories under
FRS 39 is as follows:
1.
Financial assets at fair value through profit or loss: As at end of the reporting year date there were no financial
assets classified in this category.
