77
3. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY (cont’d)
Allowances for doubtful trade and other receivables
The policy for allowances for doubtful trade and other receivables of the Group is based on the evaluation of collectibility
and on management’s judgement. Allowances are applied to trade and other receivables where events or changes
in circumstances indicate that the balances may not be collectable. If the identification is different from the original
estimate, such difference will impact the carrying value of the trade and other receivables and doubtful debts expenses
in the period in which such estimate has been changed. Please refer to Notes 7, 9 and 10 for carrying amounts of trade
and other receivables respectively.
Provision for reinstatement cost
The Group is required to estimate and recognise the cost to be incurred in returning the leased premises to their original
condition upon vacating the premises on expiry of the lease. Management has provided for such cost based on the likely
amount to be incurred and the period over which it should be amortised. The carrying value of reinstatement cost is set
out in Note 19.
Impairment of investments in, loan to and receivables from subsidiaries and associates in the Co-operative’s
financial statements
Investments in subsidiaries, loan to and receivables from subsidiaries and associates are tested for impairment whenever
there is any objective evidence or indication that these assets may be impaired. The recoverable amounts of these assets
have been determined based on the higher of fair value less cost to sell and value-in-use calculations. These calculations
require the use of estimates.
Key assumptions for the value-in-use calculations are those regarding the discount rates, growth rates and expected
changes to cash flows during the period. Management estimates discount rates using pre-tax rates that reflect current
market assessments of the time value of money and the risks specific to the investment. Estimates of growth rates are
based on economic growth forecasts for the countries in which the subsidiaries operate. Changes in cash flows take into
consideration the business plan and expectations of future changes in the market.
The carrying amounts of investments in, loan to and receivables from subsidiaries and associate are disclosed in Notes
10, 11 and 15.
NOTES TO FINANCIAL STATEMENTS
March 31, 2013
