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Notes to the financial statements
31 December 2014
Bursa Malaysia
•
Annual Report 2014
115
2. Significant accounting policies (cont’d.)
2.4 Summary of significant accounting policies (cont’d.)
(s) Contingencies
A contingent liability or asset is a possible obligation or benefit that arises from past events and whose existence will be confirmed only by the
occurrence or non-occurrence of uncertain future event(s) not wholly within the control of the Group and of the Company.
Contingent liabilities and assets are not recognised in the statements of financial position of the Group and of the Company in the current and previous
financial year ends.
2.5 Significant accounting judgements and estimates
Key sources of estimation uncertainty
The preparation of financial statements in accordance with MFRSs requires the use of certain accounting estimates and exercise of judgement. Estimates
and judgements are continually evaluated and are based on past experience, reasonable expectations of future events and other factors.
The key assumptions concerning the future and other key sources of estimation uncertainty at the financial year end, that have a significant risk of causing
a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below:
(a) Impairment of computer hardware and software
The Group and the Company review its computer hardware and software at each financial year end to determine if there is any indication of
impairment. If any such indication exists, the asset’s recoverable amount is estimated to determine the amount of impairment loss. The Group and the
Company carried out the impairment test based on a variety of estimation including the value-in-use of the CGUs to which the computer hardware and
software are allocated to. Estimating the value-in-use requires the Group and the Company to make an estimate of the expected future cash flows
from the CGU and also to choose a suitable discount rate in order to calculate the present value of those cash flows. The carrying amounts of computer
hardware and software as at the financial year end are disclosed in Notes 12 and 13 respectively.
(b) Impairment of goodwill
The Group and the Company determine whether goodwill is impaired at least on an annual basis. This requires an estimation of the value-in-use of the
CGUs to which goodwill is allocated. Estimating a value-in-use amount requires management to make an estimate of the expected future cash flows
from the CGU and also to choose a suitable discount rate in order to calculate the present value of those cash flows. The carrying amount of goodwill
as at the financial year end is disclosed in Note 14.
(c) Impairment of investment securities
The Group and the Company review its investment securities and assess at each financial year end whether there is any objective evidence that the
investment is impaired. If there are indicators or objective evidence, the investment securities are subject to impairment review.
The impairment review comprises the following judgement made by management:
(i) Determination whether its investment security is impaired following certain indicators such as, amongst others, prolonged decline in fair value,
significant financial difficulties of the issuer or obligors, the disappearance of an active trading market and deterioration of the credit quality of
the issuers or obligors.
(ii) Determination of the “significant” or “prolonged” criteria requires judgement and management evaluation on various factors, such as historical
fair value movement and the significant reduction in fair value.
The carrying amount of investment securities as at the financial year end are disclosed in Note 16.