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Notes to the Financial Statements
31 December 2015
3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(g) Impairment of assets
(i)
Non-financial assets
Assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment. Assets that have a
finite economic useful life are subject to amortisation and are reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the carrying
amount of the asset exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs of
disposal and value in use. For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are
separately identifiable cash flows which are largely independent of the cash inflows from other assets or groups of assets (CGUs).
Non-financial assets other than goodwill that suffered impairment are reviewed for possible reversal of the impairment at each
reporting date.
Any impairment loss is charged to the statement of profit or loss. Impairment losses on goodwill are not reversed. In respect of other
assets, any subsequent increase in recoverable amount is recognised in the statement of profit or loss to the extent that the asset’s
carrying amount does not exceed the carrying amount that would have been determined, net of depreciation and amortisation, if no
impairment loss had been recognised.
(ii)
Financial assets
Financial assets carried at amortised cost
Financial assets are impaired when there is objective evidence as a result of one or more events that the present value of estimated
discounted future cash flows is lower than the carrying value. Any impairment losses are recognised immediately in the statement of
profit or loss.
Financial assets are continuously monitored and allowances applied against financial assets consist of both specific impairments and
collective impairments based on the Group’s and the Company’s historical loss experiences for the relevant aged category and taking
into account general economic conditions. Historical loss experience allowances are calculated by line of business in order to reflect
the specific nature of the financial assets relevant to that line of business.
If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event
occurring after the impairment was recognised, the reversal of the previously recognised impairment loss is recognised in the
statement of profit or loss.
Financial assets classified as available-for-sale
Significant or prolonged decline in fair value below cost and significant financial difficulties of the issuer or obligor are considerations
to determine whether there is objective evidence that investment securities classified as available-for-sale financial assets are
impaired. If an available-for-sale financial asset is impaired, an amount comprising the difference between its cost (net of any
principal payment and amortisation) and its current fair value, less any impairment loss previously recognised in the statement of
profit or loss, is reclassified from equity to the statement of profit or loss. Impairment losses in the statement of profit or loss on
available-for-sale equity investments are not reversed through the statement of profit or loss in the subsequent period. Increase in
fair value, if any, subsequent to impairment loss is recognised in other comprehensive income.
