WILLAS-ARRAY ELECTRONICS (HOLDINGS) LIMITED
100
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED MARCH 31, 2016
4.
CRI T ICAL ACCOUNT ING JUDGEMENTS AND KEY SOURCES OF
ESTIMATION UNCERTAINTY
In the application of the Group’s accounting policies, which are described in Note 3, management
is required to make judgements, estimates and assumptions about the carrying amounts of assets
and liabilities that are not readily apparent from other sources. The estimates and associated
assumptions are based on historical experience and other factors that are considered to be
relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to
accounting estimates are recognised in the year in which the estimate is revised if the revision
affects only that period, or in the period of the revision and future periods if the revision affects
both current and future periods.
Critical judgements in applying the Group’s accounting policies
Management has not made any critical judgements in applying the Group’s accounting policies
other than judgements relating to estimation uncertainties as stated below.
Key sources of estimation uncertainty
The following are the key assumptions concerning the future, and other key sources of estimation
uncertainty at the end of the reporting period, that may 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.
Allowance for doubtful debts
When there is objective evidence of impairment loss, the Group takes into consideration the
estimation of future cash flows. The amount of the impairment loss is measured as the difference
between the asset’s carrying amount and the present value of estimated future cash flows
(excluding future credit losses that have not been incurred) discounted at the financial asset’s
original effective interest rate (i.e. the effective interest rate computed at initial recognition).
Where the actual future cash flows are less than expected, a material impairment loss may
arise. The carrying amount of Group’s trade receivables at March 31, 2016 were approximately
HK$560,894,000 (2015: HK$550,290,000), net of allowance for doubtful debts of HK$16,387,000
(2015: HK$26,727,000).
