Page 158 - InterloopAnnualReport2020

NOTES TO THE UNCONSOLIDATED

FINANCIAL STATEMENTS

For the year ended June 30, 2020

An impairment loss is recognized if the carrying amount of an asset or its cash–generating unit exceeds its
recoverable amount. A cash–generating unit is the smallest identifiable asset group that generates cash
flows that are largely independent from other assets and groups.

Impairment losses are recognized in profit or loss. Impairment losses recognized in respect of cash–
generating units are allocated first to reduce the carrying amount of any goodwill allocated to the units and
then to reduce the carrying amount of the other assets of the unit on a pro–rata basis. Impairment losses on
goodwill shall not be reversed.
An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable
amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed
the carrying amount that would have been determined, net of depreciation or amortization, if no impairment
loss had been recognized. Prior impairments of non–financial assets are reviewed for possible reversal at
each reporting date.
6.5 Investment in subsidiary and associate
Investments in subsidiary and associate are recognized at cost less impairment loss, if any. At each reporting
date, the recoverable amounts are estimated to determine the extent of impairment losses, if any, and
carrying amounts of investments are adjusted accordingly. Impairment losses are recognized as expense.
Where impairment losses subsequently reverse, the carrying amounts of the investments are increased
to the revised recoverable amounts but limited to the extent of initial cost of investments. A reversal of
impairment loss is recognized in the statement of profit or loss.

The profits and losses of subsidiary and associated entities are carried forward in their financial statements
and not dealt within these financial statements except to the extent of dividend declared by the subsidiary
and associate. Gains and losses on disposal of investments are included in other income.

6.6 Stores and spares
Stores and spares are carried at moving average cost. Provision is made for slow moving and obsolete
store items when so identified. Stores and spares held for capital expenditure are included in capital work in
progress.

6.7 Stock–in–trade
These are stated at the lower of cost and net realizable value (NRV). The methods used for the calculation of
cost are as follows:

Raw material – At factory Moving average cost
– In transit Invoice value plus direct charges in respect thereof.
Work in process and finished goods Prime cost including a proportion of production overheads.
Wastes are valued at net realizable value.

Stock–in–trade is regularly reviewed by the management and any obsolete items are brought down to their
net realizable value. Net realizable value signifies the selling price in the ordinary course of business less
costs necessary to be incurred to affect such sale.
6.8 Trade and other receivables
Trade receivables are initially recognized at fair value and subsequently measured at amortized cost using
the effective interest method, less any allowance for expected credit losses.
The Company has applied the simplified approach to measuring expected credit losses, which uses a
lifetime expected loss allowance. To measure the expected credit losses, trade receivables have been
grouped based on days overdue.
Other receivables are recognized at amortized cost, less any allowance for expected credit losses.

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