CFSL Integrated Report 2022

| CIM FINANCE. INTEGRATED REPORT 2022 118 EXPLANATORY NOTES 30 SEPTEMBER 2022 2. A CCOUNTING POLICIES (CONT’D) 2.7 Significant accounting policies (Cont’d) (i) Equipment Equipment is stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. An itemof equipment and any significant part initially recognised is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in profit or loss when the asset is derecognised. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. Gains and losses on disposal are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss. When revalued assets are sold, the amounts previously included in revaluation reserves are transferred to retained earnings. Depreciation on equipment and vehicles are calculated on the straight linemethod towrite off the costs or revalued amounts of the assets to their residual values as follows: % Equipment 15 – 100 Vehicles 15 – 25 The assets’ residual values, useful lives and depreciation method are reviewed and adjusted prospectively, if appropriate, at the end of each reporting period. (j) Intangible assets Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and accumulated impairment losses. Intangible assets with finite lives are amortised on a straight line basis over their estimated useful economic lives of 3 to 10 years and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are considered tomodify the amortisation period or method, as appropriate, and are treated as changes in accounting estimates. The amortisation expense on intangible assets with finite lives is recognised in the statement of profit or loss. The amortisation rates on computer software vary from 12% to 50% per annum. Customer portfolio represents the value of the customer list and is being amortised using straight linemethod over a period of five years. An intangible asset is derecognised on disposal or when no future benefits are expected from its use or disposal. The gain or loss on derecognition is the difference between any net disposal proceeds and carrying amount of the asset and is recognised in the statement of profit or loss when the asset is derecognised.

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