Minerva Equity Limited - 31 March 2019 Final 19.08.2019 - Flipbook - Page 38
Minerva Equity Limited (formerly DMWSL 881 Limited)
Notes to the financial statements
for the period ended 31 March 2019 (continued)
3 Summary of significant accounting policies (continued)
Share capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new
ordinary shares or options are shown in equity as a deduction, net of tax, from the proceeds.
Distributions to equity holders
Dividends and other distributions to Group’s shareholders are recognised as a liability in the financial
statements in the period in which the dividends and other distributions are approved by the
Company’s shareholders. These amounts are recognised in the statement of changes in equity.
Related party transactions
The Group discloses transactions with related parties which are not wholly owned within the same
Group. Where appropriate, transactions of a similar nature are aggregated unless, in the opinion of
the directors, separate disclosure is necessary to understand the effect of the transactions on the
Group financial statements.
4 Critical accounting judgements and estimation uncertainty
Estimates and judgements are continually evaluated and are based on historical experience and
other factors, including expectations of future events that are believed to be reasonable under the
circumstances.
Critical judgements in applying the entity’s accounting policies
There are no specific judgements that have been made that would result in a material change to the
statutory financial statements.
Critical accounting estimates and assumptions
The Group makes estimates and assumptions concerning the future. The resulting accounting
estimates will, by definition, seldom equal the related actual results. The estimates and assumptions
that have a significant risk of causing a material adjustment to the carrying amounts of assets and
liabilities within the next financial year are addressed below.
Useful economic lives of tangible assets
The annual depreciation charge for tangible assets is sensitive to changes in the estimated useful
economic lives and residual values of the assets. The useful economic lives and residual values are
re-assessed annually. They are amended when necessary to reflect current estimates, based on
technological advancement, future investment, economic utilisation and the physical condition of the
assets. See note 13 for the carrying amount of the property, plant and equipment, and note 3 for the
useful economic lives for each class of assets.
Fair value of tangible and intangible assets
The fair value of tangible and intangible assets acquired on acquisitions in the period (see note 31)
involved the use of valuation techniques and the estimation of future cash flows to be generated over
a number of years. The estimation of the fair values requires the combination and assumptions
including revenue growth, sales mix and volumes and customer attrition rates. In addition, the use of
discount rates requires judgement.
Impairment of intangible assets and goodwill
The Group considers whether intangible assets and/or goodwill are impaired. Where an indication of
impairment is identified the estimation of recoverable value requires estimation of the recoverable
value of the cash generating units. This requires estimation of the future cash flows from the CGUs
and also selection of appropriate discount rates in order to calculate the net present value of those
cash flows.
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