NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020
General and specific borrowing costs that are directly attributable to the acquisition, construction or production of a qualify - ing asset are capitalised during the period of time that is required to complete and prepare the asset for its intended use or sale. Qualifying assets are assets that necessarily take a substantial period of time to get ready for their intended use or sale. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation. Other borrowing costs are expensed in the period in which they are incurred.
Inventories
Road infrastructure in Cap Tamarin Ltée includes costs associated with work in progress and finished goods and are stated at the lower of cost and net realisable value. Cost comprises of all associated cost incurred in getting the asset in place for use. Costs of purchased inventory are determined after deducting rebates and discounts. Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale. Land held for resale, is stated at the lower of cost and net realisable value. Cost is assigned by specific identification and includes the cost of acquisition, and development and borrowing costs during development. When development is completed borrowing costs and other holding charges are expensed as incurred. All other inventories are stated at the lower of cost and net realisable value.
Trade receivables
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interestmethod, less any loss allowance. A loss allowance for trade receivables is establishedwhen there is objective evidence that the Group/Company will not be able to collect all amounts due according to the original terms of the receivables. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation, and default or delinquency in payments are considered indicators that the trade receivable is impaired. The carrying amount of the asset is reduced through the use of a provision for bad debt, and the amount of the loss is recognised in profit or loss within ‘administrative expenses’. When a trade receivable is uncollectible, it is written off against the provision for bad debts for trade receivables. Subsequent recoveries of amounts previously written off are credited against ‘administrative expenses’ in profit or loss.
Current and deferred income tax
The income tax expense for the year comprises current and deferred income tax.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted by the end of the reporting period. The directors periodically evaluate positions taken in tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisionswhere appropriate on the basis of amounts expected to be paid to the tax authorities. Deferred income tax is provided in full, using the liabilitymethod, on all temporary differences arisingbetween the tax bases of assets and liabilities and their carrying amounts in the financial statements. However, the deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the end of the reporting period and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.
Deferred income tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences can be utilised.
Share capital and share application monies
Ordinary shares and Share application monies are classified as equity.
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