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101
Glorious Property
Annual Report 2011
Notes to the Consolidated Financial Statements
(Continued)
31 December 2011
2 Summary of Significant Accounting Policies
(Continued)
(i) PROPERTIES UNDER DEVELOPMENT
Properties under development are stated at the lower of cost and net realisable value. Net realisable value is
determined by reference to the sale proceeds of properties sold in the ordinary course of business, less applicable
variable selling expenses and the anticipated costs to completion based on prevailing marketing conditions.
Development cost of property primarily comprises land use rights, construction costs, borrowing costs and
professional fees incurred during the development period. On completion, the properties are transferred to
completed properties held for sale.
Properties under development are classified as current assets unless the construction period of the relevant property
development project is expected to complete beyond normal operating cycle.
(j) COMPLETED PROPERTIES HELD FOR SALE
Completed properties remaining unsold at the end of reporting period are stated at the lower of cost and net
realisable value. Cost comprises development costs attributable to the unsold properties. Net realisable value is
determined by reference to the sale proceeds of properties sold in the ordinary course of business, less applicable
variable selling expenses, or by management estimates based on prevailing marketing conditions.
(k) INVENTORIES
Inventories consist of construction materials and are stated at the lower of cost and net realisable value. Cost is
determined using the weighted average method. Net realisable value is the estimated selling price in the ordinary
course of business, less applicable variable selling expenses.
(l) TRADE AND OTHER RECEIVABLES
Trade receivables are amounts due from customers for properties sold or services performed in the ordinary course
of business. If collection of trade and other receivables is expected in one year or less (or in the normal operating
cycle of the business if longer), they are classified as current assets. If not, they are presented as non-current assets.
Trade and other receivables are recognised initially at fair value, and subsequently measured at amortised cost using
the effective interest method, less provision for impairment.
(m) CASH AND CASH EQUIVALENTS
Cash and cash equivalent includes cash in hand and at banks and deposits held at call with banks with original
maturities of three months or less. Bank deposits which are restricted to use are not included in the cash and cash
equivalents.