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SINGAPORE SHIPPING CORPORATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS
for the financial year ended 31 March 2016
3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(o) Derivative financial instruments (continued)
Other non-trading derivatives
When a derivative financial instrument is not designated in a hedge relationship that qualifies for hedge
accounting, all changes in its fair value are recognised immediately in profit or loss.
(p) Impairment of non-derivative financial assets
A financial asset not carried at fair value through profit or loss is assessed at the end of each reporting
period to determine whether there is any objective evidence that it is impaired. A financial asset is
impaired if objective evidence indicates that a loss event has occurred after the initial recognition of
the asset, and that the loss event has a negative effect on the estimated future cash flows of that asset
that can be estimated reliably.
Objective evidence that financial assets are impaired can include default or delinquency by a debtor,
restructuring of an amount due to the Group on terms that the Group would not consider otherwise, or
indications that a debtor or issuer will enter bankruptcy, or adverse changes in the payment status of
borrowers or issuers in the Group.
Loans and receivables
The Group considers evidence of impairment for loans and receivables at both a specific asset and
collective level. All individually significant loans and receivables are assessed for specific impairment.
All individually significant loans and receivables found not to be specifically impaired are then
collectively assessed for any impairment that has been incurred but not yet identified. Loans and
receivables that are not individually significant are collectively assessed for impairment in groups that
share similar risk characteristics.
In assessing collective impairment, the Group uses historical trends of the probability of default, the
timing of recoveries and the amount of loss incurred, adjusted for management’s judgement as to
whether current economic and credit conditions are such that the actual losses are likely to be greater
or less than suggested by historical trends.
