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FINANCIAL REPORTS
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Bursa Malaysia •
Annual Report 2015
NOTES TO THE
FINANCIAL STATEMENTS
31 DECEMBER 2015
2. Significant accounting policies (cont’d.)
2.4 Summary of significant accounting policies (cont’d.)
(f) Impairment of financial assets (cont’d.)
(i) Loans and receivables and HTM investments (cont’d.)
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 rate. 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
and other receivables and staff loan receivables, where the carrying amount is reduced through the use of an allowance account. When
a trade or other receivable or staff loan 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 objectively related 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 asset does not exceed its amortised cost at the reversal date. The amount of reversal is recognised in profit or loss.
(ii) AFS financial assets
To determine whether there is objective evidence that investment securities classified as AFS financial assets are impaired, the Group
and the Company consider factors such as significant and/or prolonged decline in fair value below cost, significant financial difficulties
of the issuer or obligor, and the disappearance of an active trading market.
If an AFS financial asset is impaired, an amount comprising the difference between its cost (net of any principal payment and
amortisation or accretion) and its current fair value, less any impairment loss previously recognised in profit or loss, is transferred from
equity to profit or loss.
Impairment losses on AFS equity investments are not reversed in profit or loss in the subsequent periods. Increase in fair value, if
any, subsequent to impairment loss is recognised in other comprehensive income. For AFS debt investments, impairment losses are
subsequently reversed in profit or loss if an increase in the fair value of the investment can be objectively related to an event occurring
after the recognition of the impairment loss in profit or loss.
(g) Cash and cash equivalents
Cash and cash equivalents consist of cash at banks and on hand, and short-term deposits used by the Group and the Company in the
management of short-term funding requirements of their operations.