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/ MTQ CORPORATION LIMITED /
ANNUAL REPORT
2014/2015
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2015
(In Singapore dollars)
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
2.20 Inventories
Inventories are stated at the lower of cost and net realisable value. Cost includes all costs incurred in bringing the
inventories to their present location and condition.
Costs of inventories are determined using the first-in-first-out method except for those relating to turbochargers,
fuel injection parts, pipe supports and pipe suspensions, where costs are determined on a weighted average basis.
Finished goods and work-in-progress include the cost of direct materials, direct labour and proportion of production
overheads based on normal operating capacity. These costs are assigned on a first-in first-out basis.
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.
2.21 Financial instruments
(a)
Financial assets
Initial recognition and measurement
Financial assets are recognised when, and only when, the Group becomes a party to the contractual
provisions of the financial instrument. The Group determines the classification of its financial assets at
initial recognition.
When financial assets are recognised initially, they are measured at fair value, plus, in the case of financial
assets not at fair value through profit or loss, directly attributable transaction costs.
Subsequent measurement
The subsequent measurement of financial assets depends on their classification as follows:
(i)
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss include financial assets held for trading. Financial
assets are classified as held for trading if they are acquired for the purpose of selling or repurchasing
in the near term. This category includes derivative financial instruments entered into by the Group
that are not designated as hedging instruments in hedge relationships as defined by FRS 39.
Subsequent to initial recognition, financial assets at fair value through profit or loss are measured at
fair value. Any gains or losses arising from changes in fair value of the financial assets are recognised
as revenue in profit or loss. Net gains or net losses on financial assets at fair value through profit or
loss include exchange differences and interest.
The Group has not designated any financial assets upon initial recognition at fair value through profit
or loss.
