. 9 4
NOTESTOTHE
FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017
BAKER
TECHNOLOGY
L IMI TED
THE BE ST
I N US
2.
SUMMARYOF SIGNIFICANTACCOUNTINGPOLICIES (CONT’D)
2.10
Impairmentof financial assets (cont’d)
(c)
Available-for-sale financial assets
In the case of equity investments classified as available-for-sale, objective evidence of impairment
include (i) significant financial difficulty of the issuer or obligor, (ii) information about significant
changeswithanadverseeffect thathave takenplace in the technological,market, economicor legal
environment in which the issuer operates, and indicates that the cost of the investment in equity
instrumentmay not be recovered; and (iii) a significant or prolonged decline in the fair value of the
investment below its costs. ‘Significant’ is tobeevaluated against theoriginal cost of the investment
and ‘prolonged’ against theperiod inwhich the fair valuehas beenbelow its original cost.
If an available-for-sale financial asset is impaired, an amount comprising the difference between its
cost (net of any principal payment and amortisation) and its current fair value, less any impairment
loss previously recognised in theprofit or loss, is transferred fromother comprehensive income and
recognised in profit or loss. Reversals of impairment losses in respect of equity instruments are not
recognised in theprofit or loss; increase in fair valueafter their impairment are recogniseddirectly in
other comprehensive income.
In the case of debt instruments classified as available-for-sale, impairment is assessed based on
the same criteria as financial assets carried at amortised cost. However, the amount recorded for
impairment is the cumulative lossmeasured as the difference between the amortised cost and the
current fair value, less any impairment losson that investment previously recognised inprofit or loss.
Future interest incomecontinues tobeaccruedbasedon the reducedcarryingamount of theasset,
using the rate of interest used to discount the future cash flows for the purpose of measuring the
impairment loss. The interest income is recorded as part of finance income. If, in a subsequent year,
the fair valueof adebt instrument increases and the increases canbeobjectively related to anevent
occurring after the impairment losswas recognised inprofit or loss, the impairment loss is reversed
inprofit or loss.
2.11
Cashandcashequivalents
Cashandcashequivalentscomprisecashonhand,demanddeposits,andshort-term,highly liquid investments
thatare readilyconvertible toknownamountsofcashandwhicharesubject toan insignificant riskofchanges
in value. Thesealso includebankoverdrafts that forman integral part of theGroup’s cashmanagement.
