Page 54 - CPM Sri Lanka_ANNUAL REPORT 2022

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CPM Sri Lanka | Annual Report 2021-2022
3. SIGNIFICANT ACCOUNTING POLICIES
The accounting policies listed below have been applied consistently to all periods presented in these financial statements.

(a) Equipment

(i) Recognition and measurement
Cost includes expenditure that is directly attributable to the acquisition of the asset.

Gains/losses on disposal of equipment are determined by comparing the proceeds from disposal with the carrying
amount of the equipment and are recognized net within “Other Income” in the statement or income and expenditure

(ii) Depreciation
Depreciation is recognised in the statement of income and expenditure and accumulated fund on a straight- line
basis over the estimated useful lives of each part of an item of property, plant and equipment on a pro rata basis.
The estimated useful lives for the current and comparative periods are as follows:

Years
Furniture 5
Computer 5
Telephone 5
Depreciation methods, useful lives and residual values are reviewed at each reporting date.

(b) Receivables
Receivables are carried at anticipated realizable value.

(c) Cash and cash equivalents

Cash and cash equivalents comprise cash in hand, demand deposit and short-term highly liquid investments which are
readily convertible to known amounts of cash and are subjected to insignificant risks of change in value.
For the purpose of the statement of cash flows, cash and cash equivalents comprise cash in hand, deposits held
. at call with banks.
Statement of cash flow
Statement of cash flow has been prepared using the indirect method.

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