NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2022
Note 8: Impairment of non-financial assets At each reporting date, the Group reviews the carrying values of its tangible and intangible assets to determine whether there is any indication that those assets have been impaired. If such an indication exists, the recoverable amount of the asset being the higher of the asset’s fair value less costs to sell and value in use, is compared to the asset’s carrying value. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Where it is not possible to estimate the recoverable amount of an individual asset, or the asset does not generate largely independent cash inflows, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs, unless the asset’s value in use can be estimated to be close to its fair value. An impairment exists when the carrying value of an asset or cash-generating unit exceeds its estimated recoverable amount. The asset or cash-generating unit is then written down to its recoverable amount. A review was performed at reporting date and no impairment triggers were identified. Therefore no impairment of non- financial assets was made.
Note 9: Inventories
2022 $
2021 $
Current
Goods
4,310,331
4,897,317
4,310,331
4,897,317
Inventories are measured at the lower of cost and net realisable value. Cost is the specific amount per unit charged by the supplier or contract manufacturer of the product. Costs are tracked through the system using the first-in, first-out (FIFO) method. An exercise is conducted at balance date each year to determine those products where they are not expected to be able to be sold. The Company has various strategies that are used to manage inventory before specific products need to be deemed as not being able to be sold. These management strategies include promotional activity, the allocation of owned brand products to member stores and contractual relationships with suppliers where suppliers have committed to take back product. Despite the use of these strategies there are still specific items deemed not able to be sold. The balance of these items is then reduced to a net realisable value of zero and is therefore no longer included in the inventory balance. The balance of items revalued to zero as at 30 June 2022 was $172,000. At 30 June 2021 this balance was $186,615. This is a decrease of $14,615 which forms a part of the expense line cost of sales – product which has a total of $25,262,799. Inventory items are assets primarily held for the purpose of trading. The products are purchased from suppliers to be immediately available for sale to customers. Of the $4,897,317 of inventory an estimate is that $4,624,403 will be sold by 30 June 2023 and $272,914 will be sold subsequent to that.
58 I GO VITA GROUP LIMITED ANNUAL REPORT 2021-2022
Made with FlippingBook Learn more on our blog