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JOHN DANIEL HOLDINGS LIMITED AND ITS SUBSIDIARIES
INTEGRATED ANNUAL REPORT 2011
(or disposal group) that are classified as held-for-sale in
accordance with IFRS 5 Non-current Assets Held-For-Sale
and discontinued operations, which are recognised at
fair value less costs to sell.
Contingent liabilities are only included in the identifi-
able assets and liabilities of the acquiree where there is a
present obligation at acquisition date.
On acquisition, the group assesses the classification of
the acquiree’s assets and liabilities and reclassifies them
where the classification is inappropriate for group pur-
poses. This excludes lease agreements and insurance
contracts, whose classification remains as per their in-
ception date.
Non-controlling interest arising from a business combi-
nation is measured either at their share of the fair value
of the assets and liabilities of the acquiree or at fair value.
The treatment is not an accounting policy choice but is
selected for each individual business combination, and
disclosed in the note for business combinations.
In cases where the group held a non-controlling share-
holding in the acquiree prior to obtaining control, that
interest is measured to fair value as at acquisition date.
The measurement to fair value is included in profit or
loss for the 15 months. Where the existing shareholding
was classified as an available-for-sale financial asset, the
cumulative fair value adjustments recognised previously
to other comprehensive income and accumulated in eq-
uity are recognised in profit or loss as a reclassification
adjustment.
Goodwill is determined as the consideration paid, plus
the fair value of any shareholding held prior to obtaining
control, plus non-controlling interest and less the fair val-
ue of the identifiable assets and liabilities of the acquiree.
The excess of the company’s interest in the net fair value
of the identifiable assets, liabilities and contingent liabili-
ties over the cost of the business combination is immedi-
ately recognised in profit or loss.
Goodwill is not amortised but is tested on an annual ba-
sis for impairment. If goodwill is assessed to be impaired,
that impairment is not subsequently reversed.
1.2 Significant judgements and sources of
estimation uncertainty
In preparing the consolidated annual financial statements,
management is required to make estimates and assump-
tions that affect the amounts represented in the consoli-
dated annual financial statements and related disclosures.
Use of available information and the application of judge-
ment is inherent in the formation of estimates. Actual re-
sults in the future could differ from these estimates which
may be material to the consolidated annual financial
statements. Significant judgements include:
Trade receivables, Held to maturity investments and
Loans and receivables
The group assesses its trade receivables, held to maturity
investments and loans and receivables for impairment at
the end of each reporting period. In determining wheth-
er an impairment loss should be recorded in profit or
loss, the group makes judgements as to whether there is
observable data indicating a measurable decrease in the
estimated future cash flows from a financial asset.
The impairment for trade receivables, held to maturity
investments and loans and receivables is calculated on
a portfolio basis, based on historical loss ratios, adjusted
for national and industry-specific economic conditions
and other indicators present at the reporting date that
correlate with defaults on the portfolio. These annual
loss ratios are applied to loan balances in the portfolio
and scaled to the estimated loss emergence period.
Allowance for slow moving, damaged and obsolete
stock
An allowance for stock to write stock down to the lower
of cost or net realisable value. Management have made
estimates of the selling price and direct cost to sell on
certain inventory items.
Accounting Policies -
Continued
Annual Financial Statements for the 15 months ended 30 September 2011