Annual Report 2016
95
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED MARCH 31, 2016
3.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
– continued
Financial instruments
– continued
Financial assets
– continued
Impairment of financial assets – continued
For financial assets carried at cost, the amount of the impairment loss is measured as the
difference between the asset’s carrying amount and the present value of the estimated future cash
flows discounted at the current market rate of return for a similar financial asset. Such impairment
loss will not be reversed in subsequent periods (see the accounting policy below).
The carrying amount of the financial asset is reduced by the impairment loss directly for all financial
assets with the exception of trade receivables, where the carrying amount is reduced through
the use of an allowance account. Changes in the carrying amount of the allowance account are
recognised in profit or loss. When a trade receivable is considered uncollectible, it is written off
against the allowance account. Subsequent recoveries of amounts previously written off are
credited to the allowance account.
When an available-for-sale financial asset is considered to be impaired cumulative gains or losses
previously recognised in other comprehensive income are reclassified to profit or loss in the period.
For financial assets measured at amortised cost, if, in a subsequent period, the amount of the
impairment loss decreases and the decrease can be related objectively to an event occurring after
the impairment loss was recognised, the previously recognised impairment loss is reversed through
profit or loss to the extent that the carrying amount of the investment at the date the impairment is
reversed does not exceed what the amortised cost would have been had the impairment not been
recognised.
