56
Notes to Financial Statements
December 31, 2014
FINANCIAL INSTRUMENTS (cont’d)
Financial assets (cont’d)
Impairment of financial assets (cont’d)
For financial assets that are carried at cost, the amount of the impairment loss is measured as the difference between the
asset’s carrying amount and the present value of the estimated future cash flows discounted at the current market rate
of return for a similar financial asset. Such impairment loss will not be reversed in subsequent periods.
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 uncollectible, 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.
For financial assets measured at amortised cost, 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.
When an available-for-sale financial asset is considered to be impaired, cumulative gains or losses previously recognised
in other comprehensive income are reclassified to profit or loss.
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 and accumulated under the heading of fair value reserve. In respect of available-for-sale debt
securities, impairment losses are subsequently reversed through profit or loss if an increase in the fair value of the
investment can be objectively related to an event occurring after the recognition of the impairment loss.
Derecognition of financial assets
The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or
it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If
the Group neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the
transferred asset, the Group recognises its retained interest in the asset and an associated liability for amounts it may have
to pay. If the Group retains substantially all the risks and rewards of ownership of a transferred financial asset, the Group
continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.
Financial liabilities and equity instruments
Classification as debt or equity
Financial liabilities and equity instruments issued by the Group are classified according to the substance of the contractual
arrangements entered into and the definitions of a financial liability and an equity instrument.
Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its
liabilities. Equity instruments are recorded at the proceeds received, net of direct issue costs.
2. Summary of Significant Accounting Policies (cont’d)
