The National Shipping Company of Saudi Arabia
Annual Report 2008
Notes To The Consolidated Financial Statements For the year ended December 31, 2008 (InThousands Saudi Riyals)
the ending date of the financial statement, it will be reported under current assets otherwise to repost under non-current Assets.
as held to maturity based on the Company management’s intention. These investments are stated at adjusted cost by premiumor discount, if any.At the date of reclassifying the financial instruments are classified from available for sale to financial instruments held to maturity, then, the unrealized gains and losses are recorded as a separate component within shareholders’ equity and amortized over the remaining years of the life of the financial instruments as an adjustment of yield in a manner consistent with the amortization of premiums of discounts. Investments held for trading Certain investments in financial instruments are classified as held for trading based on the Company management’s intention. These investments are stated at fair value. Unrealized gains or losses are recorded in the income statement. At the date of reclassifying the financial instruments from available for sale to financial instruments held for trading, unrealized gains and losses related to these financial instruments are recorded in consolidated statement of income. Investments available for sale Certain investments in financial instruments are classified as available for sale when the conditions of classification as financial instruments held to maturity or for trading are not met. The available for sale securities are stated at fair value. Unrealized gains or losses are recognized under shareholders’ equity, whereas the realized gains or losses from the redemptions of units are charged to the consolidated income statement in the period in which these units were redeemed. If there is a permanent decline in the value of these investments or an objective evidence for impairment, the unrealized loss will be transferred to the consolidated income statement. If the investment available for sale within 12 months from
g) Inventories Inventories
represent vessels supplies, costs of spare parts and other operating supplies on board of the vessels are charged to operating expenses upon purchase. Fuel and lubricants on board of the vessels are shown as inventories at the balance sheet date, and its cost is determined using First in First out (FIFO) method which is considered more appropriate to the Company’s operations.The differences between the weighted average method and FIFO method are not significant on the consolidated statement of income. h) Intangible assets, net: 1- Deferred charges: Deferred dry- docking charges are amortized over a period of two to five years from the date of completion of dry- docking depending on the type of vessel. Where a vessel undergoes another dry-docking operation during the specified amortization period, any unamortized balance of deferred charges related to the previous dry-docking of the vessel will be amortized in the consolidated statements of income in the period that ends at the beginning of the new dry-docking operation. 2- Goodwill: Goodwill paid on the purchase of investments, representing the excess of the purchasing price over the value of purchased net assets, is re- evaluated at the end of each fiscal year and shown in the financial statements at cost after adjustment for any deterioration in its value, if any. i) Fixed assets, net Fixed assets are recorded at actual cost and are depreciated using the straight line method as follows: 1. RoRo vessels are depreciated over a period of twenty years, while VLCCs are depreciated over a period of twenty-five years. Used vessels are depreciated based on
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