Notes to the Consolidated Financial Statements  Cardno Limited and its Controlled Entities for the year ended 30 June 2010 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED  (k) Non-current Assets Held for Sale and Discontinued Operations  (l) Trade and Other Receivables  (m) Inventories  (n) Property, Plant and Equipment  Recognition and measurement  Subsequent costs  Page 35 of 80  Non-current assets, or disposal groups comprising assets and liabilities, that are expected to be recovered primarily  through sale rather than through continuing use, are classified as held for sale. Immediately before classification as held  for sale, the measurement of the assets (and all assets and liabilities in a disposal group) is brought up-to-date in  accordance with applicable accounting standards. Then, on initial classification as held for sale, non-current assets and  disposal groups are recognised at the lower of carrying amount and fair value less costs to sell. Impairment losses on  initial classification as held for sale are included in profit or loss, even when there is a revaluation. The same applies to  gains and losses on subsequent re-measurement.  A discontinued operation is a component of the consolidated entity’s business that represents a separate major line of  business or geographical area of operations that has been disposed of or is held for sale, or is a subsidiary acquired  exclusively with a view to resale. Classification as a discontinued operation occurs upon disposal or when the operation  meets the criteria to be classified as held for sale, if earlier. When an operation is classified as a discontinued operation,  the comparative statement of comprehensive income is re-presented as if the operation had been discontinued from the  start of the comparative period.  Trade receivables are recognised and carried at original invoice amount less a provision for any uncollectible debts. Interest income is recognised as it accrues. The recoverability of trade receivables is reviewed on an ongoing basis. An  estimate for impairment of doubtful debts is made when there is objective evidence collection of the full nominal amount  is no longer probable. Bad debts are written off as incurred.  Work in progress is stated at the aggregate of contract costs incurred to date plus recognised profits less recognised  losses and progress billings. If there are contracts where progress billings exceed the aggregate costs incurred plus  profits less losses, the net amounts are presented as unearned revenue under other liabilities.  Contract costs include all costs directly related to specific contracts, costs that are specifically chargeable to the  customer under the terms of the contract and an allocation of overhead expenses incurred in connection with the  consolidated entity’s activities in general.  Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated  impairment losses. Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of self-constructed assets  includes the cost of materials and direct labour, any other costs directly attributable to bringing the asset to a working  condition for its intended use, and the costs of dismantling and removing the items and restoring the site on which they  are located, and capitalised borrowing costs. Cost also may include transfers from other comprehensive income of any  gain or loss on qualifying cash flow hedges of foreign currency purchases of property, plant and equipment. Purchased  software that is integral to the functionality of the related equipment is capitalised as part of that equipment.  When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate  items (major components) of property, plant and equipment.  Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds  from disposal with the carrying amount of property, plant and equipment and are recognised net within “other income” in  the income statement.  Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only  when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item  can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance  are charged to the income statement during the reporting period in which they are incurred. 