. 101
ANNUAL
REPORT
20 1 7
THE BE ST
I N US
NOTESTOTHE
FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017
3.
SIGNIFICANTACCOUNTINGJUDGEMENTSANDESTIMATES
The preparation of theGroup’s financial statements requiresmanagement tomake judgements, estimates
and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the
disclosureof contingent liabilities at the reportingdate. However, uncertainty about these assumptions and
estimatescould result inoutcomes that requireamaterial adjustment to thecarryingamount of theasset or
liability affected in the futureperiods.
3.1
Judgementsmade inapplyingaccountingpolicies
Themanagement isof theopinion that any instancesof applicationof judgementsarenot expected tohave
a significant effect on the amounts recognised in the financial statements.
3.2
Key sourcesof estimationuncertainty
The key assumptions concerning the future and other key sources of estimation uncertainty at the end of
each reportingperiod arediscussedbelow. TheGroupbased its assumptions and estimates onparameters
available when the financial statements were prepared. Existing circumstances and assumptions about
future developments, however, may change due tomarket changes or circumstances arising beyond the
control of theGroup. Suchchanges are reflected in the assumptionswhen theyoccur.
Impairment testingonvessel
The Group assesses whether there is any indication of impairment for its vessel as at each reporting
date. Impairment is recognised when events and circumstances indicate that the vessel may be impaired
and the carrying amounts of the vessel exceed the recoverable amount. The Group determined the
recoverable amount of the vessel basedon value-in-use calculation. The value-in-use calculation is based
on adiscounted cash flowmodel. The future cash flows are forecastedbasedon time charter of the vessel
during its expecteduseful life. The future cash flows are discounted to their present value using a discount
rate that reflects the time valueofmoney.
The Group takes into consideration that any reasonable changes in key assumptions onwhich the Group
has based on to determine the recoverable amount would not cause the carrying amount of the vessel to
exceed its recoverable amount.
Thecarrying amounts of theGroup’s vessel at 31December 2017was $100,050,000 (2016: Nil).
