Gains and losses on disposals are determined by comparing proceeds with carrying amount. these are included in the income statement. 

## (Q) INTANGIBLE ASSETS 

## (i) Goodwill 

Goodwill arises on the acquisition of subsidiaries. Goodwill represents the excess of the cost of the acquisition over the Group’s interest in the net fair value of the assets and liabilities of the acquiree. Separately recognised goodwill is tested annually for impairment and carried at cost less accumulated impairment losses. Impairment losses on goodwill are not reversed. 

Goodwill is allocated to cash-generating units for the purpose of impairment testing. the allocation is made to those cash- generating units or groups of cash-generating units that are expected to benefit from the business combination in which the goodwill arose. 

## (ii) Brand 

acquired brands are carried at original cost based on independent valuation obtained at the date of acquisition. the brand represents the price paid to acquire the rights to use the Kathmandu brand. the brand is not amortised. Instead the brand is tested for impairment annually or more frequently if events or changes in circumstances indicate that it might be impaired, and is carried at cost less accumulated impairment losses. 

## (iii) Software costs 

Software costs have a finite useful life. Software costs are capitalised and written off over the useful economic life using diminishing value method and rates of 10-60%. 

Costs associated with developing or maintaining computer software programs are recognised as an expense as incurred. Costs that are directly associated with the production of identifiable and unique software products controlled by the Group, and that will probably generate economic benefits exceeding costs beyond one year, are recognised as intangible assets. direct costs include the costs of software development employees. 

## (R) TRAdE ANd OThER PAYABLES 

these amounts represent liabilities for goods and services provided to the Group prior to the end of financial year which are unpaid. the amounts are unsecured and are usually paid by the 30th of the month following recognition. trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method. 

## (S) PROVISIONS 

a provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. the Group has no provisions at year end. 

## (T) BORROWINGS 

Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in the income statement over the period of the borrowings using the effective interest method. Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the balance sheet date. 

## (u) ShARE CAPITAL 

ordinary shares are classified as equity. 

Incremental costs directly attributable to the issue of new shares are shown in equity as a deduction, net of tax, from the proceeds. 

Where any Group company purchases the Company’s equity share capital (treasury shares), the consideration paid, including any directly attributable incremental costs (net of income taxes) is deducted from equity attributable to the Company’s equity holders until the shares are cancelled or reissued. Where such shares are subsequently reissued, any consideration received net of any directly attributable incremental transaction costs and the related income tax effects, is included in equity attributable to the Company’s equity holders. 

## (V) EMPLOYEE BENEFITS 

## (i) Wages and salaries, annual leave and sick leave 

liabilities for wages and salaries, including non-monetary benefits, annual leave, and accumulating sick leave expected to be settled within 12 months of the reporting date are recognised in other payables in respect of employees’ services up to the reporting date and are measured at the amounts expected to be paid when the liabilities are settled. liabilities for non-accumulating sick leave are recognised when the leave is taken and measured at the rates paid or payable. the liability for employee entitlements is carried at the present value of the estimated future cash flows. 

