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NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 MARCH 2013
MTQ Corporat ion Limi ted Annual Repor t 2012/13 46
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
2.4 Significant accounting estimates and judgments (cont’d)
(b) Key sources of estimation uncertainty
The key assumptions concerning the future and other key sources of estimation uncertainty at the end of the reporting
period, 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:
Impairment of goodwill
The Group determines whether goodwill is impaired at least on an annual basis. This requires an estimation of the
value in use of the cash-generating units to which the goodwill is allocated. Estimating the value in use requires the
Group to make an estimate of the expected future cash flows from the cash-generating units and to choose a suitable
discount rate in order to calculate the present value of those cash flows.
Depreciation of property, plant and equipment
Property, plant and equipment are depreciated on a straight-line basis over their estimated useful lives. Management
estimates the useful lives of the assets to be within 1 to 30 years. Changes in the expected level of usage and
technological developments could impact the economic useful lives and the residual value of these assets, therefore,
future depreciation charges could be revised.
Impairment of non-financial assets other than goodwill and indefinite life intangibles
The Group assesses impairment of all assets at each reporting date by evaluating conditions specific to the Group
and to the particular asset that may lead to impairment. These include product and manufacturing performance,
technology, economic and political environments and future product expectations.
If an impairment trigger exists, the recoverable amount of the asset is determined. Given the current uncertain
economic environment, management considered that the indicators of impairment were significant enough and as
such, these assets have been tested for impairment in the current financial period.
Impairment of loans and receivables
The Group assesses at the end of each reporting period whether there is any objective evidence that a financial asset
is impaired. To determine whether there is objective evidence of impairment, the Group considers factors such as the
probability of insolvency or significant financial difficulties of the debtor and default or significant delay in payments.
Where there is objective evidence of impairment, the amount and timing of future cash flows are estimated based on
historical loss experience for assets with similar credit risk characteristics.