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51 50 Best World International Limited
Annual Report 2011
Best World International Limited
Annual Report 2011
2. Summary of Signifcant Accounting Policies (Cont’d)
Translation of Financial Statements of Foreign Entities
Each entity in the group determines the appropriate functional currency as it refects the primary
economic environment in which the relevant reporting entity operates. In translating the fnancial
statements of such an entity for incorporation in the consolidated fnancial statements in the presentation
currency the assets and liabilities denominated in other currencies are translated at end of the reporting
year rates of exchange and the income and expense items for each statement presenting proft or loss and
other comprehensive income are translated at average rates of exchange for the reporting year. The
resulting translation adjustments (if any) are recognised in other comprehensive income and accumulated
in a separate component of equity until the disposal of that relevant entity.
Segment Reporting
The group discloses fnancial and descriptive information about its reportable segments. Reportable
segments are operating segments or aggregations of operating segments that meet specifed criteria.
Operating segments are components about which separate fnancial information is available that is
evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in
assessing the performance. Generally, fnancial information is reported on the same basis as is used
internally for evaluating operating segment performance and deciding how to allocate resources to
operating segments.
Borrowing Costs
All borrowing costs that are interest and other costs incurred in connection with the borrowing of funds
that are directly attributable to the acquisition, construction or production of a qualifying asset that
necessarily take a substantial period of time to get ready for their intended use or sale are capitalised as
part of the cost of that asset until substantially all the activities necessary to prepare the qualifying asset
for its intended use or sale are complete. Other borrowing costs are recognised as an expense in the
period in which they are incurred. The interest expense is calculated using the effective interest rate method.
Property, Plant and Equipment
Depreciation is provided on a straight-line basis to allocate the gross carrying amounts of the assets less
their residual values over their estimated useful lives of each part of an item of these assets. The annual
rates of depreciation are as follows:
Freehold building - 2%
Leasehold properties - Over the terms of lease of 1.3% to 2%
Plant and equipment - 20% to 33.3%
Freehold land - Not depreciated
2. Summary of Signifcant Accounting Policies (Cont’d)
Property, Plant and Equipment (Cont’d)
An asset is depreciated when it is available for use until it is derecognised even if during that period the
item is idle. Fully depreciated assets still in use are retained in the fnancial statements.
Property, plant and equipment are carried at cost on initial recognition and after initial recognition at cost
less any accumulated depreciation and any accumulated impairment losses. The gain or loss arising from
the derecognition of an item of property, plant and equipment is determined as the difference between
the net disposal proceeds, if any, and the carrying amount of the item and is recognised in proft or
loss. The residual value and the useful life of an asset is reviewed at least at each reporting year-end and,
if expectations differ signifcantly from previous estimates, the changes are accounted for as a change in
an accounting estimate, and the depreciation charge for the current and future periods are adjusted.
Cost also includes acquisition cost, borrowing cost capitalised and any cost directly attributable to bringing
the asset or component to the location and condition necessary for it to be capable of operating in the
manner intended by management. Subsequent costs are recognised as an asset only when it is probable
that future economic benefts associated with the item will fow to the entity and the cost of the item can
be measured reliably. All other repairs and maintenance are charged to proft or loss when they are incurred.
Cost includes the initial estimate of the costs of dismantling and removing the item and restoring the
site on which it is located, the obligation for which an entity incurs either when the item is acquired or as a
consequence of having used the item during a particular period for purposes other than to produce
inventories during that period.
Investment Property
Investment property is property owned or held under a fnance lease to earn rentals or for capital
appreciation or both, rather than for use in the production or supply of goods or services or for
administrative purposes or sale in the ordinary course of business. It includes an investment property in
the course of construction. After initial recognition at cost including transaction costs the cost model is
used to measure the investment property using the treatment for property, plant and equipment, that is,
at cost less any accumulated depreciation and any accumulated impairment losses. An investment
property that meets the criteria to be classifed as held for sale is carried at the lower of carrying amount
and fair value less costs to sell. For disclosure purposes, the fair values are determined periodically on a
systematic basis at least once in three years by external independent valuers having an appropriate
recognised professional qualifcation and recent experience in the location and category of the property
being valued.
The annual rate of depreciation is 1.3%.
NOTES TO THE
FINANCIAL STATEMENTS
31 DECEMBER 2011