Page 67 - Honeywell Annual Report 2021 comm 10 09 v17a.cdr

Notes to the Financial Statements

For the Year Ended 31 March, 2021 cont’d

attributable to the design and testing of identifiable and unique software products controlled by the Company are
recognized as intangible assets when the following criteria are met:
Ÿ It is technically feasible to complete the software product and use or sell it;

Ÿ Management intends to complete the software product and use or sell it;
Ÿ There is an ability to use or sell the software product;
Ÿ It can be demonstrated how the software product will generate probable future economic benefits;
Ÿ Adequate technical, financial and other resources to complete the development and use or sell the software
product are available; and
Ÿ The expenditure attributable to the software product during its development can be reliably measured.

Directly attributable costs that are capitalized as part of the software product include the software
development, employee costs and an appropriate portion of relevant overheads. Other development expenditure

that do not meet these criteria are recognized as expenses as incurred. Development costs previously recognized
as expense are not recognized as asset in subsequent period.
Computer software development costs recognized as assets are amortized over their estimated useful lives.

ii. Amortization of Intangible Assets
Intangible assets are amortized on a straight-line basis in the income statement over their estimated useful lives,
from the date that they are available for use. The estimated useful life of computer software is between 2 to 10 years.
Amortization methods, useful lives and residual values are reviewed at each reporting date and adjusted for where
appropriate.
Impairment tests are performed on intangible assets when there is an indicator that they may be impaired. When
the carrying amount of an item of intangible assets is assessed to be higher than the estimated recoverable amount,
an impairment loss is recognised immediately in profit or loss to bring the carrying amount in line with the
recoverable amount.
An item of intangible assets is de-recognised upon disposal or when no future economic benefits are expected
from its continued use.

3.8 Financial Instruments

I. Recognition and Initial Measurement
The Company initially recognizes trade and other receivables on the date that they are originated. All other financial
assets and financial liabilities are initially recognized on the trade date at which the Company becomes a party to the
contractual provisions of the instrument.
A financial asset (unless it is a trade receivable without a significant financing component) or financial liability is
initially measured at fair value plus, for an item not at fair value through profit or loss (FVTPL), transaction costs that are
directly attributable to its acquisition or issue. A trade receivable without a significant financing component is initially
measured at the transaction price.

68 HONEYWELL FLOUR MILLS | ANNUAL REPORT | 2021 World of Possibilities