NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 December 2015
68
THE STRAITS TRADING COMPANY LIMITED
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
2.15 NON-CURRENT ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONS
Non-current assets and disposal group classified as held for sale are measured at the lower of their carrying amount and
fair value less costs to sell. Non-current assets and disposal group are classified as held for sale if their carrying amounts
will be recovered principally through a sale transaction rather than through continuing use. A component of the Group
is classified as a “discontinued operation” when the criteria to be classified as held for sale have been met or it has been
disposed of and such a component represents a separate major line of business or geographical area of operations or is
part of a single coordinated plan to dispose of a separate major line of business or geographical area of operations.
Property, plant and equipment and intangible assets once classified as held for sale are not depreciated or amortised.
2.16 DEVELOPMENT PROPERTIES
Development properties are properties acquired or being constructed for sale in the ordinary course of business, rather
than to be held for the Group’s own use, rental or capital appreciation.
Development properties are measured at the lower of cost and net realisable value.
Non-refundable commissions paid to sales or marketing agents on the sale of real estate units are expensed when incurred.
Net realisable value of development properties is the estimated selling price in the ordinary course of business, based on
market prices at the reporting date and discounted for the time value of money if material, less the estimated costs of
completion and the estimated costs necessary to make the sale.
The costs of development properties recognised in profit or loss on disposal are determined with reference to the specific
costs incurred on the property sold and an allocation of any non-specific costs based on the relative size of the property sold.
2.17 INVENTORIES
Inventories are stated at the lower of cost and net realisable value.
Cost of trading inventory of refined tin metal is determined on a first-in first-out basis. Cost of inventories of tin-in-
concentrates and tin-in-process which have matching sales contract for refined tin metal from tin smelting operations, are
stated at the value of such contract less allowance for conversion. This value is consistent with cost, as it is the practice of
tin smelting operations of the subsidiary to buy tin-in-concentrates and sell refined tin metal on a back to back price basis.
Absorption costing is used in the mining operations to assign costs to tin inventories using the weighted average cost
method which includes both variable and fixed overhead cost components.
Cost of other inventories comprising stores, spares, fuels, coal and saleable by-products is determined on the weighted
average cost method. Production cost is not allocated to by-products as it is not material.
Where necessary, allowance is provided for damaged, obsolete and slow moving items to adjust the carrying value of
inventories to the lower of cost and net realisable value.
Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and
the estimated costs necessary to make the sale.
