1. Financial Accounting II Lecture 30

5. Sample Notes to the Accounts
Policy:
Leased assets held under finance lease are stated at cost less accumulated depreciation at the rates and basis applicable to company owned assets. The outstanding obligations under the lease less finance charges allocated to future period is shown as liability. The financial charges are calculated at the interest rates implicit in the lease and are charged to the profit and loss account.

6. Sample Notes to the Accounts
Repairs and maintenance are charged to revenue. Material renewals and improvements are capitalized.
Gain and loss on disposal of fixed assets are recognized in the profit and loss account.

7. Sample Notes to the Accounts
Disclosure:
The average rate of interest used as the discounting factor (i.e. implicit in the lease) is 14.73% to 15.25% (2004: 14.75% to 15.25%) per annum. the lease agreements have the option for purchase of the assets at the end of the lease period. There are no financial restrictions in the lease agreements.

8. Current Liabilities – 4th Schedule Part II
9(A) Current liabilities and provisions shall, so far as they are appropriate to the company's business, be classified under the following sub- heads, namely:
(i) Trade and other payables, which shall be classified as:

9. Current Liabilities – 4th Schedule Part II
(a) Creditors;
(b) Murabaha;
(c) Accrued liabilities;
(d) Advance payments;
(e) Payable to employee retirement benefit funds;
(f) Unpaid and unclaimed dividend; and
(g) Others ( to be specified, if material);

10. Current Liabilities – 4th Schedule Part II
(ii) Interest, profit, return or mark-up accrued on loans and other payables;

11. Current Liabilities – 4th Schedule Part II
(iii) Short term borrowings which shall be classified as:
(a) Short-term borrowings, distinguishing between secured and unsecured and between loans taken from:
(i) banking companies and other financial institutions other than related parties;
(ii) related parties; and
(iii) others;
(b) Short-term running finance, distinguishing between secured and unsecured;

12. Current Liabilities – 4th Schedule Part II
(iv) Current portion of long term borrowings;
(v) Current portion of long term murabaha; and
(vi) Provision for taxation, showing separately income tax and other taxes.

13. A provision is a liability of uncertain timing or amount.
Definitions – IAS 37
A provision is a liability of uncertain timing or amount.

14. Provisions, Contingent Liabilities and
IAS 37
Provisions, Contingent Liabilities and
Contingent Assets

15. A provision is a liability of uncertain timing or amount.
Definitions – IAS 37
A provision is a liability of uncertain timing or amount.

16. Definitions – IAS 37
A liability is a present obligation of the entity arising from a past event the settlement of which is expected to result in an outflow from the entity of resources embodying economic benefits.