NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 December 2015
69
ANNUAL REPORT 2015
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
2.18 TRADE AND OTHER RECEIVABLES
Trade and other receivables, include amounts due from subsidiaries, associates, joint ventures, related companies and
loans to related companies. When recognised initially, they are measured at fair value. Subsequent to initial recognition,
the receivables are measured at amortised cost using the effective interest method, less impairment. Gains and losses are
recognised in profit or loss when the receivables are de-recognised or impaired, and through the amortisation process.
Trade and other receivables are recognised and carried at original invoice amounts less allowances for any uncollectible
amounts. Allowance is made when there is objective evidence that the Group will not be able to collect the debts. Bad
debts are written off when identified.
2.19 CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprise cash at bank and on hand, short-term deposits that are readily convertible to cash
and which are subject to an insignificant risk of changes in value. These also include bank overdrafts that form an integral
part of the Group’s cash management.
2.20 IMPAIRMENT OF ASSETS
(a)
Non-financial assets
An assessment is made at each reporting date to determine whether there is an indication that an asset may
be impaired. If any indication exists, or when annual impairment testing for an asset is required, the estimated
recoverable amount of that asset is determined.
Where the carrying amount of an asset or cash-generating unit exceeds its recoverable amount, the asset is
considered impaired and is written down to its recoverable amount. Impairment losses of continuing operations
are recognised in the profit or loss 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.
Calculation of recoverable amount
An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s fair value less costs of disposal
and its value in use and is determined for an individual asset. If the asset does not generate cash inflows that are
largely independent of those from other assets or groups of assets, the recoverable amount is determined for
the cash-generating unit to which the asset belongs to. In assessing value in use, the estimated future cash flows
expected to be generated by the asset are discounted to their present value using a pre-tax discount rate that
reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair
value less costs of disposal, recent market transactions are taken into account, if available. If no such transactions
can be identified, an appropriate valuation model is used.
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 cover 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, 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.
