2. Summary of significant accounting policies (cont’d)
2.13 Impairment of non-financial assets (cont’d)
The Group bases its impairment calculation on detailed budgets and forecast calculations
which are prepared separately for each of the Group’s cash-generating units to which the
individual assets are allocated. These budgets and forecast calculations generally covers a
period of five years. For longer periods, a long-term growth rate is calculated and applied
to project future cash flows after the fifth year.
Impairment losses of continuing operations are recognised in profit or loss in those
expense categories consistent with the function of the impaired asset except for assets
that are previously revalued where the revaluation was taken to other comprehensive
income. In this case, the impairment is also recognised in other comprehensive income
up to the amount of any previous revaluation. After the recognition of an impairment loss,
the depreciation (amortisation) charge for the asset shall be adjusted in future periods to
allocate the asset’s revised carrying amount, less its residual value (if any), on a systematic
basis over its remaining useful life.
For assets excluding goodwill, an assessment is made at the end of each reporting period
as to whether there is any indication that previously recognised impairment losses may
no longer exist or may have decreased. If such indication exists, the Group estimates the
asset’s or cash generating unit’s recoverable amount. A previously recognised impairment
loss is reversed only if there has been a change in the estimates used to determine the
asset’s recoverable amount since the last impairment loss was recognised. If that is the
case, the carrying amount of the asset is increased to its recoverable amount. That increase
cannot exceed the carrying amount that would have been determined, net of depreciation,
had no impairment loss been recognised previously. Such reversal is recognised in profit
or loss unless the asset is measured at revalued amount, in which case the reversal if
treated as a revaluation increase. After such a reversal, the depreciation charge is adjusted
in future periods to allocate the asset’s revised carrying amount, less any residual value,
on a systematic basis over its remaining useful life.
2.14 Financial instruments
(a) Financial assets
Initial recognition and measurement
Financial assets are recognised when, and only when, the Group becomes a party
to the contractual provisions of the financial instrument. The Group determines the
classification of its financial assets at initial recognition.
When financial assets are recognised initially, they are measured at fair value,
plus, in the case of financial assets not at fair value through profit or loss, directly
attributable transaction costs.
NOTES TO THE FINANCIAL
STATEMENTS
For the financial year ended 30 June 2015
ASL Marine Holdings Ltd. /Annual Report 2015
86
