3.
SIGNIFICANT ACCOUNTING JUDGMENTS AND ESTIMATES (CONTINUED)
Key sources of estimation uncertainty (continued)
(b)
Inventories and related allowance (continued)
During the year, the Group continued its business strategy as a steel solution provider focusing
on meeting customers’ steel requirements. The Group wrote down inventories by $2,139,000
to convert slow moving inventories to cash and mitigate the impact of the decline in steel
prices.
The carrying amount of inventories for the Group at the balance sheet date is disclosed in
Note 16 to the financial statements.
(c)
Allowance for doubtful debts
The Group establishes allowance for doubtful receivables on a case-by-case basis when they
believe that payment of amounts owed is unlikely to occur. In establishing these allowances,
the Group considers its historical experience and changes to its customers’ financial position.
If the financial conditions of receivables were to deteriorate, additional allowances may be
required. The carrying amount of trade receivables for the Group at the balance sheet date
is disclosed in Note 17 to the financial statements.
4.
REVENUE
Revenue of the Group represents the invoiced value of goods sold less goods returned and discounts
allowed, net of goods and services tax. Revenue of the Group is in respect of external transactions
only.
Group
2015
2014
$’000
$’000
Sale of goods
111,256
159,657
Provision of services
16,613
28,193
127,869
187,850
76
NOTES TO THE
FINANCIAL STATEMENTS
For the financial year ended 31 December 2015
HG METAL MANUFACTURING LIMITED
ANNUAL REPORT 2015
