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Notes to the financial statements
31 December 2014
Bursa Malaysia
•
Annual Report 2014
105
2. Significant accounting policies (cont’d.)
2.4 Summary of significant accounting policies (cont’d.)
(d) Impairment of non-financial assets (cont’d.)
An asset’s recoverable amount is the higher of an asset’s fair value less costs to sell and its value-in-use. For the purpose of assessing impairment,
assets are grouped at the lowest levels for which there are separately identifiable cash flows (i.e. CGUs). 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. Where the carrying amount of an asset exceeds its recoverable amount,
the asset is written down to its recoverable amount. Impairment losses recognised in respect of a CGU or groups of CGUs are allocated first to reduce
the carrying amount of any goodwill allocated to those units or groups of units and then, to reduce the carrying amount of the other assets in the unit
or groups of units on a pro-rata basis.
Impairment losses 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.
An assessment is made at each financial year end as to whether there is any indication that previously recognised impairment losses may no longer
exist or may have decreased. A previously recognised impairment loss for an asset, other than goodwill, 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 revised recoverable amount. That increase cannot exceed the carrying amount that would have been determined (net
of amortisation or 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 is treated as a revaluation increase. Impairment loss on goodwill is not reversed in a
subsequent period.
(e) Financial assets
Financial assets are recognised in the statements of financial position when, and only when, the Group and the Company become a party to the
contractual provisions of the financial instrument.
When financial assets are initially recognised, 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.
The Group and the Company determine the classification of financial assets upon initial recognition. The categories include financial assets at fair value
through profit or loss (FVTPL), loans and receivables, held-to-maturity (HTM) investments and AFS financial assets.
(i) Financial assets at FVTPL
Financial assets are classified as financial assets at FVTPL if they are held for trading or are designated as such upon initial recognition. Financial
assets are classified as held for trading if they are acquired principally for the purpose of selling in the near term or are derivatives that do not
meet the hedge accounting criteria (including separated embedded derivatives).
Subsequent to initial recognition, financial assets at FVTPL are measured at fair value. Any gains or losses arising from changes in fair value
are recognised in profit or loss. Net gains or net losses on financial assets at FVTPL do not include exchange differences, interest and dividend
income. Exchange differences, interest and dividend income on financial assets at FVTPL are recognised separately in profit or loss as part of
other income or other losses.
Financial assets at FVTPL could be presented as current or non-current. Financial assets that are held primarily for trading purposes are
presented as current, whereas financial assets that are not held primarily for trading purposes are presented as current or non-current based on
the settlement date.
The Group and the Company do not have any financial assets at FVTPL at the current and previous financial year ends.