b) Commissions and direct expenses of the hire purchase contracts. The Company recognises initial commissions and direct expenses arising in respect of hire purchase contracts as expenses by amortising them over the installment period using the effective interest rate method, with amortisation presented as a deduction from hire purchase interest income. Unearned interest income is stated net of initial commissions and direct expenses of hire purchase contracts. 4.3
Cash and cash equivalents Cash and cash equivalents consist of cash in hand and at banks, and all highly liquid investments with an original maturity of three months or less and not subject to withdrawal restrictions.
4.4
Hire purchase and installment sales receivables Hire purchase and installment sales receivables are stated at the net realisable value. Unearned hire purchase interest income are deducted from hire purchase and installment sales receivables. The Company provides allowance for doubtful accounts at the percentage of the amount of outstanding receivables net of unearned hire purchase interest income, based on the number of months overdue.
4.5
Assets foreclosed These represent assets repossessed from hire purchase and installment sales receivables and are stated at the lower of cost (which mostly comprises the net outstanding balance) and estimated net realisable value. Allowance is made for the decline in value of the repossessed assets.
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