Integrated Reports Senwesbel Consolidated Financial Statements 2018 - Page 78

AVAILABLE-FOR-SALE FINANCIAL INVESTMENTS For available-for-sale financial investments, the group assesses at each reporting date whether there is objective evidence that an investment or group of investments are impaired. 2.14.2 NON-FINANCIAL ASSETS On each reporting date the group considers whether there are any indications of impairment of an asset. If such an indication exists, the group prepares an estimate of the recoverable amount of the asset. The recoverable amount of an asset or the cash generating unit, within which it and other assets operate, is the greater of the fair value less the cost of selling and the value in use of the asset. Where the carrying amount of an asset exceeds the recoverable amount, the impairment is determined and the carrying amount written off to the recoverable amount. Where the value in use is determined, the expected future cash flow is discounted to their present value by using a pre-tax 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 identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for publically 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, systematically 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 distinguished from other creditors. Provisions are only recognised if: • a currently constructive or legal obligation exists due to a past event; • an outflow of economic benefits is probable in order to meet the commitment; and • a reliable estimate of the amount it 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 recognised because: • it is improbable that an outflow of economic resources will occur; and/or • the amount cannot be measured or estimated reliably. 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. 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 consideration, if reissued, is recognised in equity. 77 SENWESBEL ANNUAL FINANCIAL STATEMENTS 2018 Senwesbel Limited Reg no: 1996/017629/06