held to maturity are not met, The available for sale investments are stated at fair value and unrealized gains or losses are recognized under shareholders’ equity, The realized gains or losses from the redemption of units are recognized in the consolidated statement of income in the period in which these units are redeemed, If there is a permanent decline in the value of these investments or objective evidence for impairment, the unrealized loss is transferred to the consolidated statement of income. If there is an intention to sell the available for sale investment within 12 months from the consoli- dated balance sheet date, it is reported under investment current assets, otherwise under non-current assets. If the fair value of the investments mentioned above is not available or the possibility of evaluating them by using alter- native methods, cost is considered the most appropriate method for such securities. K- Intangible assets The long term substantial evaluation of transportation contracts (which resulted from purchasing the operations and assets of Vela Company) was recorded as intangible assets in the consolidated statement of income. The value of those intangible assets are amortized over the average useful life of purchased assets and estimated in accordance with the company’s account- ing policy of recording fixed assets and its depreciations. Amortization is charged to the consolidated statement of income. L- Fixed assets Fixed assets are recorded at cost and are depreciated using the straight-line method over the estimated useful lives using the following depreciation rates:
Category
Depreciation rate
Category
Depreciation rate
Buildings and improvements 5 to 33.3%
Vehicles
20 to 25%
Fleet and equipment *
4 to 15%
Computers
15 to 25%
Containers and trailers
8.33 to 20%
Containers yard equipment 10% to 25%
Furniture and fixtures
10%
Others
7 to 15%
Tools and office equipment 2.5 to 25%
RoCons and VLCCs are depreciated over a period of twenty-five years. Used vessels are depreciated based on their estimated remaining useful lives, 10% of the vessels’ cost is calculated as residual value. Rolling vessel equipment is depreciated over a period of fifteen years.
Ships under construction are stated at actual cost plus all other attributable costs until to be ready for use. Upon completion, ships under construction are transferred to fixed assets and are depreciated over their estimated useful lives.
Gains or losses from disposal of fixed asset is determined by comparing proceeds from disposal with the carrying value and are recognized in the consolidated statement of income.
Expenditures for maintenance and routine repairs which do not materially extend the estimated useful life of an asset are charged to the consolidated statement of income when incurred. Major renewals and improvements, if any, are capitalized and the assets replaced are retired.
110
Annual Report 2014
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