Notes to Financial Statement Those ten Accounting Standards are required to adopt for the financial statements beginning in or after January 1, 2008 onwards. The Company’s management deems that the adoption of those Accounting Standards are not materially affected to the financial statements in year starting. 5. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 5.1 Revenues and Expense Recognition 5.1.1 Revenues from sales of real estate is recognized on the percentage of completion and the ownership have been transferred to the buyer. 5.1.2 Revenues from sales of goods are recognized as income when the significant risk and rewards of ownership have been transferred to the buyer. 5.1.3 Revenues from construction contract is recorded on the percentage of completion which is based on the proportion of actual costs to the estimated costs. Undue of realized income is shown as “Unbilled construction income”. 5.1.4 Other income and expenses are recognized on an accrual basis. 5.2 Current investments Investment in opened end fund in the form of debt securities is stated at fair value. The difference from changes in valuation are recorded as unrealized gain (loss) on change in investment valuation under shareholders’ equity. 5.3 Allowance for doubtful accounts The Company and subsidiaries provided the allowance for doubtful accounts from the estimated uncollectible receivable based on the past collection experience. 5.4 Inventories Valuation Inventories are valued at the lower of cost or net realizable value. Cost of inventories - properties foreclosed consist of cost of land acquisition, land development, related expenses of project and interest on borrowing relating to land acquisition and construction are capitalized as cost of goods and stopped to recognize when the construction is completed which will be amortized as cost of sales in accordance with the size of land transferred. Subsidiaries’ inventories - raw materials are valued at the lower of cost on the weighted average method or net realizable value. 5.5 Long-term investment Investment in subsidiaries are stated at cost method less provision for impairment (if any). 5.6 Land and equipment Assets are stated at cost less accumulated depreciation. Equipment and supplies are depreciated on a straight-line basis over the estimated useful lifes of the assets for period of approximately 5 years. 5.7 Land held for development Land held for development means land that the Company intends to hold for future benefit and recorded as non-currentassets which are stated at cost less provision for impairment. Cost consists of land cost and related expenses for land acquisition including cost of borrowing from development such land. The Company will stop to calculate cost of borrowing when land development is completed.
145 Annual Report 2007