Page 124 - S P Setia Annual Report 2016

 

 

 

 

 

Page 124 - S P Setia Annual Report 2016
P. 124

122   S P Setia Berhad Group
                Annual Report 2016




          Notes To The Financial Statements

          For The Financial Year Ended 31 December 2016

          1.   SIGNIFICANT ACCOUNTING POLICIES (CONT’D.)
              (o)   Financial instruments (cont’d.)


                   (iii)   Derecognition of financial assets and liabilities

                       A financial asset or part of it is derecognised when the contractual rights to the cash flows from the financial asset expire or
                       the financial asset is transferred to another party without retaining control or substantially all risks and rewards of the asset.

                       On derecognition of a financial asset, the difference between the carrying amount and the sum of the consideration
                       received together with any cumulative gain or loss that has been recognised in other comprehensive income is recognised
                       in profit or loss.

                       A financial liability or part of it is derecognised when the obligation specified in the contract is discharged, cancelled or expired.

                       On derecognition of a financial liability, the difference between the carrying amount and the consideration paid, including
                       any non-cash assets transferred or liabilities assumed, is recognised in profit or loss.
              (p)   Impairment of assets


                   The Group and the Company assess at each reporting date whether there is any objective evidence that a financial asset is impaired.

                   (i)   Trade and other receivables and other financial assets carried at amortised cost

                       To determine whether there is objective evidence that an impairment loss on financial assets has been incurred, the Group
                       and the Company consider factors such as the probability of insolvency or significant financial difficulties of the debtor and
                       default or significant delay in payment. 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 payment, 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 the 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 receivables, where the carrying amount is reduced through the use of an allowance account. When a
                       trade 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 related objectively 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)   Unquoted equity securities carried at cost

                       If there is objective evidence (such as significant adverse changes in the business environment where the issuer operates,
                       probability of insolvency or significant financial difficulties of the issuer) that an impairment loss on financial assets carried
                       at cost has been incurred, the amount of the loss is measured as the difference between the asset’s carrying amount and
                       the present value of estimated future cash flows discounted at the current market rate of return for a similar financial assets.
                       Such impairment losses are not reversed in subsequent period.
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