83
83
2015/2016 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
for the financial year ended 31 March 2016
3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(p) Impairment of non-derivative financial assets (continued)
Loans and receivables (continued)
An impairment loss in respect of loans and receivables measured at amortised cost is calculated as
the difference between its carrying amount and the present value of the estimated future cash flows
discounted at the asset’s original effective interest rate. Losses are recognised in profit or loss and
reflected in an allowance account against loans and receivables. When the Group considers that there
are no realistic prospects of recovery of the asset, the relevant amounts are written off. If the amount
of impairment loss subsequently decrease and the decrease can be related objectively to an extent
occurring after the impairment was recognised, then the previously recognised impairment loss is
reversed through profit or loss.
(q) Impairment of non-financial assets
The carrying amounts of the Group’s non-financial assets, other than inventories, are reviewed at each
reporting date to determine whether there is any indication of impairment. If any such indication exists,
then the asset’s recoverable amount is estimated. For goodwill, the recoverable amount is estimated
each year at the same time. An impairment loss is recognised if the carrying amount of an asset or its
related cash-generating unit (“CGU”) exceeds its estimated recoverable amount.
The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs
to sell. In assessing value in use, the estimated future cash flows 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 or CGU. For the purpose of impairment testing, assets that cannot be
tested individually are grouped together into the smallest group of assets that generates cash inflows
from continuing use that are largely independent of the cash inflows of other assets or CGUs.
Subject to an operating segment ceiling test, for the purposes of goodwill impairment testing, CGUs
to which goodwill has been allocated are aggregated so that the level at which impairment testing
is performed reflects the lowest level at which goodwill is monitored for internal reporting purposes.
Goodwill acquired in a business combination is allocated to groups of CGUs that are expected to benefit
from the synergies of the combination.
The Group’s corporate assets do not generate separate cash inflows and are utilised by more than one
CGU. Corporate assets are allocated to CGUs on a reasonable and consistent basis and tested for
impairment as part of the testing of the CGU to which the corporate asset is allocated.
