« آخـــر الـــمـــشـــاركــــات » |
|
أدوات الموضوع | انواع عرض الموضوع |
|
#1
|
|||
|
|||
Summary of significant accounting polices
Accounts receivable Trade receivables are stated at original invoice amount less any allowance for any uncollectible amounts. An estimate for doubtful debts is made when collection of the full amount is no longer probable. Bad debts are written off when identified. Inventories Inventories are valued at the lower of cost and net realizable value. Costs are those expenses incurred in bringing each item to its present location and condition and is determined using the weighted average method. Interest bearing loans and bonds All loans and bonds are initially recognized at the fair value of the consideration received less directly attributable transaction costs. After initial recognition, interest bearing loans and bonds are subsequently measured at amortised cost using the effective interest rate method. Gains and losses are recognised in the income statement when liabilities are derecognised as well as through the amortisation proceeds. Available-for-sale investments Available for sale investments are recorded at cost at acquisition and measured subsequently at fair value. Gains and losses resulted from revaluating the investment at fair value are reported as a separate component of equity until the investment is derecognized or determined to be impaired. On derecognition or impairment the cumulative gain or loss previously reported in equity is recognized in the income statement for the year. Intangible assets Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is fair value as at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortization and any accumulated impairment losses. The useful lives of these intangible assets are assessed to be either finite or indefinite. Intangible assets with finite lives are amortized over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortization period and the amortization method for an intangible assets with a finite useful life is reviewed at least at each financial year end. Intangible assets with indefinite useful lives are tested for impairment annually, such intangibles are not amortized. Trade and other payables Liabilities are recognized for amounts to be paid in the future for goods received or services rendered, whether billed by the supplier or not. Employees' end of service indemnities The company provides end of service indemnities to its employees. The entitlement to these indemnities is based upon the employees’ final salary and length of service, subject to the completion of a minimum service period in accordance with the company’s internal policies. The expected costs of these indemnities are accrued over the period of employment. Actuarial gains and losses are recognized as income or expense and where material is amortized over the expected average remaining working lives of the employees. Taxation Current income tax: Current income tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to taxation authorities. The tax rates and tax laws used are those that are enacted or substantially enacted by the balance sheet. Deferred income tax: Deferred income tax is provided, using the liability method, on all temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred income tax assets are recognized for all deductible temporary differences, carry-forward of unused tax assets and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, carry-forward of unused tax assets and unused tax losses can be utilized. The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilized. Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance sheet date. Sales tax Revenues, expenses and assets are recognised net of the amount of sales tax except: • where the sales tax incurred on a purchase of assets or services is not recoverable from the taxation authority, in which case the sales tax is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and receivables and payables that are stated with the amount of sales tax included. • The net amount of sales tax recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the balance sheet. Business combinations and Goodwill Business combinations are accounted for using the purchase method. Goodwill is initially measured at cost being the excess of the cost of the business combination over the Company’s share in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities. After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Company’s cash generating units that are expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units. The company assesses whether there are any indicators that goodwill is impaired at each reporting date. Goodwill is tested for impairment, annually and when circumstances indicate that the carrying value may be impaired. Impairment is determined for goodwill by assessing the recoverable amount of the cash-generating units, to which the goodwill relates. Where the recoverable amount of the cash-generated units is less than their carrying amount an impairment loss is recognized. Impairment losses relating to goodwill cannot be reversed in future periods. Impairment and unrecoverability of financial assets The company at each balance sheet date assesses whether there is an indication that a financial asset or group of financial asset may be impaired. If such indications exists, the estimated recoverable amount of that asset is determined and any losses resulted from the impairment is calculated as the difference between the recoverable amount and the carrying amount. Impairment losses are recognized in the statement of income. Provisions Provisions are recognized when the company has an obligation (legal or constructive) arising from a past event, and the costs to settle the obligation are both probable and able to be reliably measured. Equipment sales: Revenues from equipment sales are recognized when the significant risks and rewards of ownership are transferred to the buyer. When the equipment is sold by a third-party retailer (indirect distribution channel) who purchases it from the company and receives a commission for signing up the customer, the related revenue is recognized when the equipment is sold to the end-customer in an amount reflecting the company’s best estimate of the retail price
Leases Leases where the lessor retains substantially all the risks and benefits of ownership of the asset are classified as operating leases. Operating lease payments are recognized as an expense in the consolidated income statement on a straight-line basis over the lease term. Foreign currencies Transactions in foreign currencies are recorded at the rate ruling at the date of the transactions. Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate of exchange ruling at the balance sheet date. All differences resulted from the retranslation are taken to the income statement. Credit risk It is the risk that other parties will fail to discharge their obligations to the Company. The Company manages the credit risk with its customers by establishing credit limits for customers' balances and also disconnect the service for customers exceeding certain limits for certain period of time. Also, the diversity of the Company’s customers base (residential, corporate, government agencies) limits the credit risk. The Company has also credit department that continuously monitors the credit status of the Company’s customers. The Company also deposits its cash balances with number of major high rated financial institutions and has policy of limiting its balances deposited with each institution. Liquidity risk The Company limits its liquidity risk by ensuring bank facilities are available. The Company’s terms of sales require amounts to be paid within 30 days of the date of sale. The table below summarises the maturities of the Company’s undiscounted financial liabilities at 31 December 2007, based on contractual payment dates and current market interest rates. Currency risk Most of the Company's transactions are in Jordanian Dinars and U.S. Dollars. The Jordanian Dinars exchange rate is fixed against the U.S. Dollar (US $ 1.41 for JD 1), accordingly the company is not exposed to significant currency risk. During 2007 the company invested in Light speed (Bahraini company), accordingly the consolidated financial statements might be affected with changes in Bahraini Dinar exchange rate against Jordanian Dinars. Management believes that the effect will be immaterial since the total assets of Light speed represent less than 0.5% of the company total assets. The company has loans payable in Euro and short term deposits in Euro. Changes in Euro exchange rates might significantly affect loans values. The table below indicates the Company’s foreign currency exposure at 31 December, as a result of its monetary assets and liabilities. The analysis calculates the effect of a reasonably possible movement of the JD currency rate against the Euro, with all other variables held constant, on the income statement (due to the fair value of currency sensitive monetary assets and liabilities). Fair values of financial instruments Financial instruments comprise of financial assets, financial liabilities and derivatives. Financial assets consist of cash and bank balances and receivables. Financial liabilities consist of bank overdrafts, term loans, obligations under finance leases, and payables. Derivatives consist of foreign exchange contracts. The fair values of financial instruments, with the exception of certain available-for-sale investments carried at cost, are not materially different from their carrying values. ساعد في نشر والارتقاء بنا عبر مشاركة رأيك في الفيس بوك |
|
|