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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)
FINANCIAL INSTRUMENTS (Cont’d)
Financial assets (Cont’d)
For available-for-sale equity instruments, a significant or prolonged decline in the fair value of the investment below its
cost is considered to be objective evidence of impairment.
For financial assets, objective evidence of impairment could include:
• significant financial difficulty of the issuer or counterparty; or
• default or delinquency in interest or principal payments; or
• it becoming probable that the borrower will enter bankruptcy or financial re-organisation.
For certain categories of financial asset, such as trade receivables, assets that are assessed not to be impaired
individually are, in addition, assessed for impairment on a collective basis. Objective evidence of impairment for a
portfolio of receivables could include the Group’s past experience of collecting payments, an increase in the number
of delayed payments in the portfolio past the average credit period, as well as observable changes in national or local
economic conditions that correlate with default on receivables.
For financial assets carried at amortised cost, the amount of the impairment is the difference between the asset’s
carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate.
The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the
exception of trade receivables where the carrying amount is reduced through the use of an allowance account. When
a trade receivable is uncollectable, it is written off against the allowance account. Subsequent recoveries of amounts
previously written off are credited to the allowance account. Changes in the carrying amount of the allowance account
are recognised in profit or loss.
With the exception of available-for-sale equity instruments, 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 loss was
recognised, the previously recognised impairment loss is reversed through profit or loss to the extent the carrying
amount of the investment at the date the impairment is reversed does not exceed what the amortised cost would have
been had the impairment not been recognised.
In respect of available-for-sale equity instruments, impairment losses previously recognised in profit or loss are not
reversed through profit or loss. Any subsequent increase in fair value after an impairment loss is recognised in other
comprehensive income.
NOTES TO FINANCIAL STATEMENTS
March 31, 2013
