4.2 Trade account receivable Trade account receivable are carried in the statement of financial position at the amount expected to be collectible. Allowance for doubtful receivables are estimated by percentage of accounts receivable which is assessed primarily on analysis of payment histories and review of all outstanding amounts at the end of the reporting period. The amount of the allowance is the difference between the carrying amount of the receivable and the amount expected to be collectible. Bad debts are written off during the year in which they are identified. 4.3 Inventories Inventories are stated at the lower of cost or net realisable value. The cost of purchase comprises both the purchase price and costs directly attributable to the acquisition of the inventory, such as import duties and transportation charge, less all attributable discounts, allowances or rebates. The cost of finished goods and work in process comprise raw materials, direct labor, other direct costs and related production overheads, the latter being allocated on the basis of normal operating activities. Costs of inventories are calculated as the follow method:-
Finished goods - FIFO method Work in process - FIFO method Raw material and supplies - FIFO method
The Group estimates the net realisable value by using the selling price in the ordinary course of business less selling expenses. The Group makes the allowance for diminutions in the value of obsolete, defective or slow-moving inventories.
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GUNKUL_2012 GUNKUL ENGINEERING PCL Annual Report 2012