Integrated Reports Senwes Financial Review 2018 - Page 70

70 FINANCIAL REVIEW discounting rate reflecting the current market assessments of the time value of money and specific risks associated with the asset. In determining fair value less costs to sell, recent market transactions are taken into account. If no such transactions can be identi- fied, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded companies or other available fair value indicators. Impairment losses of continuing operations are recognised in profit or loss. If there is an indication that previously recognised impairment losses no longer exist or that they have decreased, an estimate is once again made of the recoverable amount of the asset in question excluding goodwill and if necessary, the impairment is written back to the statement of profit or loss. The write-back may not cause the carrying value to exceed the recoverable amount or the value it would have been if it was not previously impaired. After such a write-back, the depreciation expense in future periods is adjusted to apportion the adjusted carrying amount of the asset, less its residual value, systema-­ tically over the remaining useful life. 2.15 Provisions and contingent liabilities Provisions Provisions are liabilities of which the timing or amount is uncertain and can therefore be distin- guished from other creditors. Provisions are only recognised if: it is improbable that an outflow of economic resources will occur; and/or the amount cannot be measured or estimated reliably. an outflow of economic benefits is probable in order to meet the commitment; and a reliable estimate of the amount can be made. Provisions are measured at the best estimate of the expenditure required to settle the present obligation at the reporting date. Provisions are disclosed in note 16. Liabilities are current obligations arising from past events, which are expected to result in economic benefits flowing from the business, when met, and are accounted for directly after the occurrence of the event giving rise to the obligation. Liabilities form part of creditors in the statement of financial position. Contingent liabilities Contingent liabilities are potential obligations arising from past events, the existence of which will only be confirmed upon the occurrence or non-occurrence of one or more uncertain future events beyond the control of the business. Contingent liabilities may also arise from a current obligation arising from past events but are not FINANCIAL REVIEW Contingent liabilities are not recognised but are merely disclosed by way of a note in the financial statements (See note 18). 2.16 Non-current assets held-for-sale and discontinued operations A discontinued operation is a component of an entity which has been sold or classified as held- for-sale and: represents a separate important business component or geographical area of activities; forms part of a single co-ordinated plan to sell a separate important business segment or geographical area of activities; or is a subsidiary acquired with the sole purpose of selling it. An item is classified as held-for-sale if the carrying amount of such item will largely be recovered through a transaction of sale rather than through continued use. Non-current assets and disposal groups classified as held-for-sale are measured at the lower of their carrying value and fair value less cost to sell. In the statement of comprehensive income, the after tax profit or loss is reported separately from profit or loss from continuing operations. Property, plant and equipment, once classified as held-for-sale, are not depreciated. a currently constructive or legal obligation exists due to a past event; recognised because: 2.17 Treasury shares Own equity instruments that are reacquired are recognised at cost and deducted from equity. No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the group’s own equity instruments. Any difference between the carrying amount and the conside-­ ration, if reissued, is recognised in equity. 3. SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS The preparation of the group’s consolidated financial statements requires management to make judg- ments, estimates and assumptions that affect the reporting amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities, at the reporting date. However, uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of the asset or liability affected in future periods. Estimates and assumptions The key assumptions concerning the future and other key sources of estimation uncertainty at the