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(11817-V) |

Annual Report



2.3 Summary of Significant Accounting Policies (Cont’d)

(r) Financial Assets (Cont’d)

Subsequent to initial recognition, loans and receivables are measured at amortised cost using the

effective interest method. Gains and losses are recognised in profit or loss when the loans and

receivables are derecognised or impaired, and through the amortisation process.

A financial asset is derecognised when the contractual right to receive cash flows from the asset

has expired. On derecognition of a financial asset in its entirety, the difference between the

carrying amount and the sum of the consideration received and any cumulative gain or loss that

had been recognised in other comprehensive income is recognised in profit or loss.

Regular way purchases or sales are purchases or sales of financial assets that require delivery

of assets within the period generally established by regulation or convention in the marketplace

concerned. All regular way purchases and sales of financial assets are recognised or derecognised

on the trade date i.e., the date that the Group and the Company commit to purchase or sell the


(s) Impairment of Financial Assets

The Group and the Company assess at each reporting date whether there is any objective

evidence that a financial asset is impaired.

To determine whether there is objective evidence that an impairment loss on financial assets has

been incurred, the Group and the Company consider factors such as the probability of insolvency

or significant financial difficulties of the debtor and default or significant delay in payments. For

certain categories of financial assets, such as trade receivables, assets that are assessed not to

be impaired individually are subsequently assessed for impairment on a collective basis based on

similar risk characteristics. Objective evidence of impairment for a portfolio of receivables could

include the Group’s and the Company’s past experience of collecting payments, an increase in

the number of delayed payments in the portfolio past the average credit period and observable

changes in national or local economic conditions that correlate with default on receivables.

If any such evidence exists, the amount of impairment loss is measured as the difference between

the asset’s carrying amount and the present value of estimated future cash flows discounted at the

financial asset’s original effective interest. The impairment loss is recognised in profit or loss.

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 becomes uncollectible, it is written off

against the allowance account.

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 was recognised, the previously

recognised impairment loss is reversed to the extent that the carrying amount of the assets does

not exceed its amortised cost at the reversal date. The amount of reversal is recognised in the

profit or loss.