Financial statements Notes to the consolidated financial statements
3. Significant accounting policies
Inventories are measured at the lower of cost and net realisable value. The cost of inventories is based on the weighted average ccst
formula, and includes expenditure incurred in acquiring the inventories, production or conversion costs and other costs incurred
in bringing them to their existing location and condition. Net realisable value is the estimated selling price in the ordinary course
of business, less the estimated costs of completion and selling expenses.
(ii) Finished products and work in progress
Finished products and work in progress are measured at manufacturing cost based on weighted averages and takes into account
the production stage reached. Costs include an appropriate share of direct production overheads based on normal operating capacit
(Hi) Other inventories and spare parts
The cost of other inventories is based on weighted averages. Spare parts are valued at the lower of cost and net realisable value.
Value reductions and usage of parts are charged to profit or loss. Spare parts that are acquired as part of an equipment purchase
and only to be used in connection with this specific equipment are initially capitalised and amortised as part of the equipment.
(i) Financial assets
A financial asset is assessed at each reporting date to determine whether there is any objective evidence that it is impaired.
A financial asset is considered to be impaired if objective evidence indicates that one or more events have had a negative effect
on the estimated future cash flows of that asset that can be estimated reliably.
An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying
amount, and the present value of the estimated future cash flows discounted at the original effective interest rate. An impairment
loss in respect of an available-for-sale financial asset is calculated by reference to its current fair value.
Individually significant financial assets are tested for impairment on an individual basis. The remaining financial assets are assessec
collectively in groups that share similar credit risk characteristics.
All impairment losses are recognised in profit or loss. Any cumulative loss in respect of an available-for-sale financial asset
recognised previously in other comprehensive income and presented in the fair value reserve in equity is transferred to profit
An impairment loss is reversed if the reversal can be related objectively to an event occurring after the impairment loss was
recognised. For financial assets measured at amortised cost and available-for-sale financial assets that are debt securities, the
reversal is recognised in profit or loss. For available-for-sale financial assets that are equity securities, the reversal is recognised
in other comprehensive income.