d ) Financial assets All financial assets are initially stated at cost , being the fair value of consideration given plus acquisition costs . Purchases and sales of financial assets are recognised on trade date which is the date on which the company commits to purchase or sell the asset . Accounting policies for each category of financial assets subsequent to initial recognition are set out below :
Loans and receivables Trade receivables , loans , and other receivables are recorded at amortised cost using the effective interest rate method less impairment . Impairment losses are measured as the difference between the investment ’ s carrying amount and the present value of estimated future cash flows , excluding future credit losses that have not been incurred . The cash flows are discounted at the investment ’ s original effective interest rate . Impairment losses are recognised in profit or loss .
Available-for-sale financial assets Available-for-sale investments are those financial assets that are designated as available-for-sale . When available-for-sale financial investments are recognised initially , they are measured at fair value . Any available-for-sale financial investments donated to the company are recognised at fair value at the date the company obtains control of the asset .
After initial recognition available-for-sale financial investments are measured at fair value with gains or losses being recognised in other comprehensive income until the investment is derecognised or until the investment is determined to be impaired , at which time the cumulative gain or loss previously recognised in other comprehensive income is reclassified to the statement of comprehensive income .
The fair value of investments that are actively traded in organised financial markets is determined by reference to quoted market bid prices at the close of business on the reporting date . For investments with no active market , fair value is determined using valuation techniques . Such techniques include using recent arm ’ s length market transactions , reference to the current market value of another instrument that is substantially the same , discounted cash flow analysis , and option pricing models .
Impairment of financial assets Financial assets , other than those at fair value through profit or loss , are assessed for indicators of impairment at each balance date . Financial assets are impaired where there is objective evidence that as a result of one or more events that occurred after the initial recognition of the financial asset the estimated future cash flows of the investment have been impacted .
e ) Impairment The carrying values of property , plant and equipment are reviewed for impairment at each reporting date , with recoverable amount being estimated when events or changes in circumstances indicate that the carrying value may be impaired .
The recoverable amount of property , plant and equipment is the higher of fair value less costs to sell and value in use . Depreciated replacement cost is used to determine value in use . Depreciated replacement cost is the current replacement cost of an item of plant and equipment less , where applicable , accumulated depreciation to date , calculated on the basis of such cost .
Impairment exists when the carrying amount of the cash generating unit exceeds its estimated recoverable amount . The asset is then written down to its recoverable amount .
For the purpose of impairment testing , assets that cannot be tested individually are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or group of assets - cash-generating units ( CGU ).
An impairment loss is recognised if the carrying amount of an asset or its CGU exceeds its recoverable amount . Impairment losses are recognised in profit or loss . Impairment losses recognised in respect of CGUs are allocated to reduce the carrying amount of the assets in the CGU on a pro rata basis .
Continues ...
116th Annual Report 2011 27