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3.0 Accounting standards adopted by the company
The Company publishes quarterly and yearly accounts on time, with adequate details to asses Company performance. The Financial Statements included in the Annual Report have been prepared in accordance with Sri Lanka Accounting Standards, issued by The Institute of Chartered Accountants of Sri Lanka and comply with requirements of the Companies Act No. 07 of 2007 and Listing Rules of Colombo Stock Exchange. (dilmah ceylon tea PLC, 2016/17)
The Directors guarantee that confidential and price sensitive information’s are not made open until published.
Two accounting standards adopted by the company are discussed below,
3.1 IAS 16 (Property, Plant ; Equipment)
IAS 16 which is applied to property, plant and equipment defines PPE as “tangible items that are held for use in the production or supply of goods or services, or for administrative purposes, for rental to others; and are expected to be used more than one accounting period. (Anon., 2018)
Dilmah presents its assets and liabilities in statement of financial position based on current and non-current classification. It classifies an asset as current when it is:
• Expected to be recognized or intended to be consumed or sold in the normal operating cycle of the company
• Held primarily for the purpose of trading
• Expected to be realized within twelve months after the reporting period or
• Cash unless prevented from being exchanged or used to settle a liability for a minimum of twelve months after the reporting period
Dilmah classifies all other assets as non-current. (Dilmah Ceylon Tea Company PLC, 2016/17)
3.1.1 Recognition and Classification
Dilmah PLC measures its property, plant and equipment at cost less accumulated
Depreciation and accumulated impairment loss.. (Dilmah Ceylon Tea Company PLC, 2016/17)
Property Plant and Equipment of Dilmah Company PLC for the year ended 31st march 2017 is as follows,
3.1.2 Depreciation policy used by the company
Dilmah calculates depreciation by using a straight line method on the cost all of its Property, Plant and Equipment other than land; The Company uses the following useful lives to write off depreciation each year,
Buildings -Over the lease period
Plant and Machinery -10 to 25 years
Furniture and Fittings – 6.67 years
Office, Factory and Stores Equipment -5 years
Computer Hardware -3 years
Motor Vehicles -5 years
Depreciation charges of Dilmah Company PLC for the year ended 31st march 2017 is as follows
3.1.3 Derecognition
An item is derecognized when Dilmah disposes an item of Property, Plant and Equipment when no future economic benefits are expected from its use .Any gain or loss arising on disposal of the asset is included in the Statement of Comprehensive Income in the year the asset is disposed. (Dilmah Ceylon Tea Company PLC, 2016/17)
3.2 IAS 38 (Intangible Assets)
Intangible assets are defined as non-monetary items without physical substance. An asset is a resource that is controlled by the entity as a result of past events and from which future economic benefits are expected to flow into the entity. (Anon., 2018)
Dilmah PLC measures its Intangible assets on initial recognition at cost less any accumulated amortization and accumulated impairment losses. Dilmah’s intangible assets have been evaluated to have finite useful lives and it has only computer software as its intangible asset.
Calculation related to Intangible Assets of Dilmah Company PLC for the year ended 31st march 2017 is as follows,
Intangible Assets of Dilmah Company PLC for the year ended 31st march 2017 is as follows,
Amortization related to
3.2.1 Amortization policy used by the company
Dilmah PLC amortizes its computer soft ware over its useful economic life of 10 years and assessed for impairment whenever it may be impaired. computer software with a finite useful life is reviews its amortization method and amortization period atleast at the end of each. (Dilmah Ceylon Tea Company PLC, 2016/17)
