|
4.2. Inventory
Inventory is valued at the lower of
cost price and net market value of
similar items. In case, the cost
price is above the market
value the difference is recognized
as provision for inventory decrease.
The cost price of inventory is
calculated according
to below mention table:
|
|
Method |
Goods |
|
|
Moving Weighted Average
/ FIFO
Weighted Average
Weighted Average
Weighted Average |
Raw Materials and
Packaging
Goods under Production
Finished Goods
Parts |
|
4.3. Fixed Assets
4.3.1. Fixed assets are recorded at
historical cost. Renovation and
substantial repairs, which
significantly increase the capacity
or useful life of the fixed asset,
are considered as capital
expenditures and are depreciated
over the remaining useful life of
such asset. Expenses related to
regular maintenance and minor
repairs, incurred to increase the
expected economic benefit of an
asset are considered as ordinary
expenses.
4.3.2. Intangible fixed assets and
goodwill were revalued in 1992 by an
amount of Rials 930 billion and in
2004 by an amount of Rials 13.646
billion. The adjustments are
recognized as assets and capital
increase.
4.3.3. Depreciation of
movable/immoveable assets and
goodwill is calculated and reflected
in the financial statements based on
the estimated useful life of such
assets in accordance with the
depreciation schedule pursuant to
Article 151 of the Direct Taxation
Act as amended.
Some of the rates and methods of
depreciation are set out as below:
|
|
Depreciation Method |
Depreciation Rate |
Assets |
|
|
Straight line
Straight line
Reducing balance
Straight line
Reducing balance |
3 years
10 Years
3.5%
10 years
3.5% |
Movable assets
Immovable assets /
unadjusted
Immovable assets /
adjusted
Goodwill / unadjusted
Goodwill / adjusted |
|
|
* Depreciation of fixed assets in
other countries are calculated
according to the depreciation
schedule of the host country
4.3.4. Depreciation of fixed assets
in affiliated companies (except
provincial subsidiaries) is
calculated in accordance with their
useful life (under consideration of
the depreciations table of Clause
151 of the Direct Taxation Act)
according to below mentioned methods
and rates:
|
|
Method |
Depreciation Rate |
Depreciation |
|
|
Reducing balance
Reducing balance /
Straight Line
Straight Line
Reducing balance
Reducing balance
Straight Line
Straight Line
Straight Line
Reducing Balance |
7%,8%,10%,12%
7%,10%,12% - 15 years
4, 8, 10&12 years
8%, 10%, 12%, 25%, 35%
15 & 25 %
5 years
10 years
30 & 100%
25%,30%,35% |
Buildings
Installations
Machineries
Machineries
Agricultural Machineries
Railway Installations
Fixtures
Equipment and Moulds
Vehicles |
|
|
4.4. Consolidated Goodwill
Consolidated accounting of
commercial entities is done by the
purchase method. Surplus of cost
price of purchase of investments in
consolidated companies to the
group's share in the net fair value
of their assessable assets and
liabilities at the time of purchase
is recognized as goodwill and
depreciated on a straight line basis
over 10 years. Goodwill which is
derived from ownership of a
subsidiary is reflected in the
consolidated balance sheet as the
book value of long-term investment.
|