Consolidated Financial Statements
46
Notes To The Consolidated Financial Statements For the year ended December 31, 2008 (InThousands Saudi Riyals)
their estimated remaining useful life, after taking into consideration 10% of the vessels’ cost as residual value.
2. Other fixed assets items are depreciated using depreciation rates appropriate to these assets estimated useful lives which is as follows:
5-33.3% 8.33-20% 10% 2.5-25% 20-25% 15-25% 10-25% 7-15%
Buildings & Improvements Containers & trailers Furniture & fixture Tools & office equipments Motor Vehicles Computers Container yard Others
j) Impairment of non-current assets At each balance sheet date, the carrying amounts of non- current assets are reviewed to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the assets is estimated in order to determine the extent of the impairment loss. Where it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash generating unit to which the asset belongs. If the recoverable amount of an assets or cash-generating unit is estimated to be less than its carrying amount, the carrying amount of the assets or cash-generating unit is reduced to its recoverable amount. Impairment loss is recognized as an expense in the consolidated statement of income immediately. loss subsequently reverses, the carrying amount of the asset or cash- generating unit is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the assets or cash-generating unit in prior years. A reversal of an impairment loss is recognized as income immediately in the consolidated statement of Income. Where an impairment
k) End of service benefits provision Employees’ end of service benefits are provided for on the basis of accumulated services period in accordance with the By-Laws of the Company and in conformity with the Saudi Labor Law. End of service benefits in respect of subsidiaries outside the Kingdom of Saudi Arabia are provided for based on the applicable regulations applied in these subsidiaries. l) Revenue recognition TheCompanyadoptedthecompleted voyage policy to determine the revenues and expenses for the period of the voyages. A voyage is considered to be a “Completed Voyage” when a vessel has sailed from the last discharging port of a voyage. Freight revenues, direct and indirect operating expenses associated with incomplete voyages are deferred until completion of voyage. Incomplete voyages are shown at net amount in the consolidated balance sheet under “Incomplete Voyages”. Revenues from chartering and other associated activities are recorded when services are rendered and are recorded in conformity with contract periods, voyages durations, and agreed upon services. Other income is recorded when earned. m) Bunker subsidy Bunker subsidy is computed on bunker quantities purchased and recorded in the consolidated
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