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JUMBO GROUP LIMITED
Notes to the Combined
Financial Statements
As at 30 September 2015
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)
Derecognition of financial liabilities
The Group derecognises financial liabilities when, and only when, the Group’s obligations are discharged, cancelled or expired.
Offsetting arrangements
Financial assets and financial liabilities are offset and the net amount presented in the statement of financial position when the Company
and the Group has a legally enforceable right to set off the recognised amounts; and intends either to settle on a net basis, or to realise
the asset and settle the liability simultaneously. A right to set-off must be available today rather than being contingent on a future event
and must be exercisable by any of the counterparties, both in the normal course of business and in the event of default, insolvency or
bankruptcy.
LEASES - Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of
ownership to the lessee. All other leases are classified as operating leases.
The Group as lessee
Assets held under finance leases are recognised as assets of the Group at their fair value at the inception of the lease or, if lower, at the
present value of the minimum lease payments. The corresponding liability to the lessor is included in the balance sheet as a finance
lease obligation. Lease payments are apportioned between finance charges and reduction of the lease obligation so as to achieve a
constant rate of interest on the remaining balance of the liability. Finance charges are charged directly to profit or loss, unless they are
directly attributable to qualifying assets, in which case they are capitalised in accordance with the Group’s general policy on borrowing
costs. Contingent rentals are recognised as expenses in the periods in which they are incurred.
Rentals payable under operating leases are charged to profit or loss on a straight-line basis over the term of the relevant lease unless
another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
Contingent rentals arising under operating leases are recognised as an expense in the period in which they are incurred.
In the event that lease incentives are received to enter into operating leases, such incentives are recognised as a liability. The aggregate
benefit of incentives is recognised as a reduction of rental expense on a straight-line basis, except where another systematic basis is
more representative of the time pattern in which economic benefits from the leased asset are consumed.
INVENTORIES - Inventories comprising mainly food and beverages are stated at the lower of cost and net realisable value. Cost
comprises all cost of purchase and overheads that have been incurred in bringing the inventories to their present location and condition.
Cost is calculated using the first-in-first-out method. Net realisable value represents the estimated selling price less all estimated costs
of completion and costs to be incurred in marketing, selling and distribution.
PROPERTY, PLANT AND EQUIPMENT - Property, plant and equipment are stated at cost less accumulated depreciation and any
accumulated impairment losses.
Depreciation is charged so as to write off the cost or valuation of assets over their estimated useful lives, using the straight-line method,
on the following bases:
Audio, visual and office equipment
-
3 to 10 years
Kitchen equipment and utensils
-
3 to 10 years
Furniture and fittings
-
3 to 10 years
Renovation
-
3 to 10 years
Leasehold industrial buildings
-
44 to 50 years
Motor vehicles
-
10 years
The estimated useful lives, residual values and depreciation method are reviewed at the end of each financial year, with the effect of any
changes in estimate accounted for on a prospective basis.
Fully depreciated assets still in use are retained in the financial statements.
