NOTES
TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2016
(In Singapore dollars)
64
ANNUAL REPORT 2015/2016
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
2.19 Impairment of non-financial assets
The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any
indication exists, or when an annual impairment testing for an asset is required, the Group makes an estimate of
the asset’s recoverable amount.
An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s fair value less costs of disposal
and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows
that are largely independent of those from other assets or group of assets. Where the carrying amount of an asset
or cash-generating unit exceeds its recoverable amount, the asset is considered impaired and is written down
to its recoverable amount. 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 post-tax discount rate that reflects current market
assessments of the time value of money and the risks specific to the asset. In determining fair value less costs of
disposal, recent market transactions are taken into account, if available. If no such transactions can be identified,
an appropriate valuation model is used.
The Group bases its impairment calculation on detailed budgets and forecast calculations which are prepared
separately for each of the Group’s cash-generating units to which the individual assets are allocated. These
budgets and forecast calculations are generally covering a period of five years. For longer periods, a long-term
growth rate is calculated and applied to project future cash flows after the fifth year.
Impairment losses of continuing operations 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.
For assets excluding goodwill, an assessment is made at each reporting date as to whether there is any indication
that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists,
the Group estimates the asset’s or cash-generating unit’s recoverable amount. A previously recognised impairment
loss 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 recoverable amount. That increase cannot exceed the carrying amount that would have been determined, net
of 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.
