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AFRICAN DAWN ANNUAL REPORT 14

Accounting Policies continued 1.4 Property, plant and equipment continued This recognition principle is applied to all property, plant, and equipment costs at the time they are incurred. These costs include costs incurred initially to acquire or construct an item of property, plant and equipment and costs incurred subsequently to add to, replace part of, or service it. All other repairs and maintenance expenditures are charged to the statement of comprehensive income during the financial period in which they are incurred. Depreciation is calculated using the straight line method to allocate the cost of each asset to its residual value over its estimated useful life as follows: Item Average useful life Furniture and fixtures 4 - 6 years Motor vehicles 5 years Office equipment 3 -5 years IT equipment 3 -5 years The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting date. An assetís carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. Capitalised leased assets are depreciated at the shorter of the useful life or the period of the lease. Gains and losses on disposals are determined by comparing the disposal proceeds with the carrying amount and are included in the statement of comprehensive income. The depreciation charge for each period is recognised in profit or loss unless it is included in the carrying amount of another asset. Assets which the (company/group) holds for rentals to others and subsequently routinely sell as part of the ordinary course of activities, are transferred to inventories when the rentals end and the assets are available-for-sale. These assets are not accounted for as noncurrent assets held for sale. Proceeds from sales of these assets are recognised as revenue. All cash flows on these assets are included in cash flows from operating activities in the cash flow statement. 1.5 Intangible assets Computer Software Computer software is carried at cost less accumulated amortisation and impairment losses. Costs associated with maintaining computer software programmes are recognised as an expense as incurred. Costs to acquire the computer software licenses for development purposes are capitalised on the basis of the costs incurred to acquire and bring to use the specific software. Cost associated with computer software development (software development employee costs, developers consulting fees and an appropriate portion of relevant overheads) activities that are directly associated with the production of identifiable and unique software products are considered for capitalisation as intangible asset, if the following criteria are met; If development costs can be measured reliably, completion of the development of the software is technically and commercially feasible, the Group can demonstrate that the intangible asset will be used to generate future economic benefits, the Group intends to and has sufficient resources to complete development and to use the asset, and the Group can demonstrate the ability to use or sell the intangible asset. Other development expenditure which does not meet the above requirements is recognised in the profit and loss component of the statement of comprehensive income. The assetís useful lives are annually reviewed and adjusted where appropriate. Amortisation is provided to write down the intangible assets, on a straight line basis, to their residual values as follows: Item Average useful life Micro Finance Software 5 years Medical Finance Software 5 years AFRICAN DAWN 3 7 ANNUAL REPORT 2014


AFRICAN DAWN ANNUAL REPORT 14
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