76
STAMFORD LAND CORPORATION LTD
Notes to Financial Statements
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(xvii) Financial guarantees
The Company has issued corporate guarantees to banks for bank borrowings of its subsidiaries.
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subsidiaries fail to make principal or interest payments when due in accordance with the terms of their
borrowings.
Financial guarantees are initially recognised at their fair values plus transaction costs in the Company’s
balance sheet.
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borrowings, unless it is probable that the Company will reimburse the banks for an amount higher
than the unamortised amount. In this case, the financial guarantees shall be carried at the expected
amount payable to the banks in the Company’s balance sheet. Intra-group transactions are eliminated
on consolidation.
(xviii) Completed properties for sale
Completed properties held for sale are those which are intended for sale in the ordinary course of
business. They are stated at the lower of cost and estimated net realisable value. Cost includes cost of
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costs, incurred in developing the properties. Borrowing costs payable on loans funding a property
under development are also capitalised, on a specific identification basis, as part of the cost of the
property under development until the completion of development. Net realisable value represents the
estimated selling price less costs to be incurred in selling the property.
(xix)
Inventories
Inventories are carried at the lower of cost and net realisable value. Cost is determined using the
weighted average cost method and includes the cost of purchase and other costs in bringing the
inventories to their present location and condition. Net realisable value is the estimated selling price
in the ordinary course of business, less the estimated costs of completion and applicable variable
selling expenses.
