65
Notes to Financial Statements
December 31, 2014
3. Critical Accounting Judgements and Key Sources of Estimation
Uncertainty
In the application of the Group’s accounting policies, which are described in Note 2, management is required to
make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not
readily apparent from other sources. The estimates and associated assumptions are based on historical experience
and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of
the revision and future periods if the revision affects both current and future periods.
Critical judgements in applying the Group’s accounting policies
The management is of the view that there are no critical judgement involved that will have a significant effect on the
amounts recognised in the financial statements other than those involving estimations below.
Key sources of estimation of uncertainty
The key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the
reporting period, that have a significant risk of causing a material adjustment to the financial statements within the
next financial year, are discussed below:
Useful lives of property, plant and equipment
As described in Note 2, the Group reviews the estimated useful lives of property, plant and equipment at the end
of each annual reporting period. During the financial period, the management determined that the useful lives of
property, plant and equipment are appropriate and no revision is required.
Impairment of property, plant and equipment
The Group assesses annually whether property, plant and equipment have any indication of impairment in
accordance with their accounting policy. Where there is indication of impairment, the recoverable amounts of
property, plant and equipment would be determined based on the higher of fair value less costs to sell and value-
in-use calculations. These value-in-use calculations require the use of judgements and estimates.
Please refer to Note 13 for the carrying amount of the Group’s and the Co-operative’s property, plant and equipment
at the end of the reporting period.
Accrual for contract costs capitalised under property, plant and equipment
The Group capitalised property, plant and equipment at the end of each reporting period when the outcome of
construction contract can be estimated reliably. Significant assumptions are required to estimate the total contract
costs and the variation works that affect the recognition of property, plant and equipment. In making these estimates,
management has relied on past experience and knowledge of the project engineers and quantity surveyors. The
carrying amounts of property, plant and equipment assets arising from constructed leasehold land and building,
furniture, fittings and renovation, plant and machinery and computers at the end of the reporting period amounted
to $338,000,000.
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 collectible. 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.
