WILLAS-ARRAY ELECTRONICS (HOLDINGS) LIMITED
94
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED MARCH 31, 2016
3.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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Financial instruments
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Financial assets
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Impairment of financial assets
Financial assets, other than those at FVTPL, are assessed for indicators of impairment at the end
of each reporting period. Financial assets are considered to be impaired when 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 financial assets have been affected.
For available-for-sale equity investment, a significant or prolonged decline in the fair value of that
investment below its cost is considered to be objective evidence of impairment.
For all other financial assets, objective evidence of impairment could include:
• significant financial difficulty of the issuer or counterparty; or
• breach of contract, such as default or delinquency in interest and principal payments; or
• it becoming probable that the borrower will enter bankruptcy or financial re-organisation; or
• disappearance of an active market for that financial asset because of financial difficulties.
For certain categories of financial assets, such as trade receivables, assets that are assessed not
to be impaired individually are, in addition, assessed for impairment on a collective basis. Objective
evidence of impairment for a portfolio of receivables could include the Group’s past experience
of collecting payments, an increase in the number of delayed payments in the portfolio past the
average credit period of 60 days, observable changes in national or local economic conditions that
correlate with default on receivables.
For financial assets carried at amortised cost, the amount of the impairment loss recognised is the
difference between the asset’s carrying amount and the present value of the estimated future cash
flows discounted at the financial asset’s original effective interest rate.
