. 9 3
ANNUAL
REPORT
20 1 7
THE BE ST
I N US
NOTESTOTHE
FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017
2.
SUMMARYOF SIGNIFICANTACCOUNTINGPOLICIES (CONT’D)
2.10
Impairmentof financial assets
TheGroup assesses at each reporting datewhether there is any objective evidence that a financial asset
is impaired.
(a)
Financial assetscarriedat amortisedcost
For financial assets carried at amortised cost, theGroup first assesses whether objective evidence
of impairment exists individually for financial assets that are individually significant, or collectively
for financial assets that are not individually significant. If the Group determines that no objective
evidence of impairment exists for an individually assessed financial asset, whether significant or
not, it includes the asset in a group of financial assets with similar credit risk characteristics and
collectively assesses them for impairment. Assets that are individually assessed for impairment and
for which an impairment loss is, or continues to be recognised are not included in a collective
assessment of impairment.
If there is objective evidence that an impairment loss on financial assets carried at amortised cost
hasbeen incurred, theamount of the loss ismeasuredas thedifferencebetween theasset’scarrying
amount and the present value of estimated future cash flows discounted at the financial asset’s
original effective interest rate. If a loan has a variable interest rate, the discount rate for measuring
any impairment loss is thecurrent effective interest rate. Thecarryingamountof theasset is reduced
through theuseof an allowance account. The impairment loss is recognised in theprofit or loss.
When the asset becomes uncollectible, the carrying amount of impaired financial assets is reduced
directly or if an amount was charged to the allowance account, the amounts charged to the
allowance account arewrittenoff against thecarrying valueof the financial asset.
To determine whether there is objective evidence that an impairment loss on financial assets has
been incurred, the Group considers factors such as the probability of insolvency or significant
financial difficulties of thedebtor anddefault or significant delay inpayments.
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 was recognised, the previously
recognised impairment loss is reversed to the extent that the carrying value of the asset does not
exceed its amortised cost at the reversal date. The amount of reversal is recognised in the profit
or loss.
(b)
Financial assetscarriedat cost
If there isobjectiveevidence (suchas significant adversechanges in thebusinessenvironmentwhere
the issuer operates, probability of insolvency or significant financial difficulties of the issuer) that
an impairment loss on a financial asset carried at cost has been incurred, the amount of the loss is
measured as thedifferencebetween the asset’s carrying amount and thepresent valueof estimated
future cash flows discounted at the current market rate of return for a similar financial asset. Such
impairment losses arenot reversed in subsequent periods.
