EXPLANATORY NOTES 30 SEPTEMBER 2023 (i) Equipment Equipment is stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. An item of 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 line method to write 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, depreciation method and useful lives are reviewed and adjusted prospectively, if appropriate, at the end of each reporting period. (j) Intangible assets (excluding goodwill) 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 to modify 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. Expenditure that enhances or extends the benefits of intangible assets beyond their original specifications and lives is recognised as a capital improvement and added to the original cost of the intangible asset. The amortisation rates on intangible assets vary from 12% to 50% per annum. Customer portfolio represents the value of the customer list and is being amortised using straight line method over a period of ten 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. (k) Current and deferred income tax (i) Current income tax Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted at the reporting date in the countries where the Group and the Company operate and generate taxable income. 2. ACCOUNTING POLICIES Continued 2.8 Significant accounting policies Continued 116 CIM FINANCE ANNUAL REPORT
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