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notes to the financial statements (cont’d)
for the financial year ended 30 June 2014
JAYA TIASA HOLDINGS BERHAD
66
2. Summary of significant accounting policies (CONT’D)
2.13 Impairment of non-financial assets
The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any
such indication exists, or when an annual impairment assessment for an asset is required, the Group makes
an estimate of the asset’s recoverable amount.
An asset’s recoverable amount is the higher of an asset’s fair value less costs to sell and its value in use. For
the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately
identifiable cash flows (cash-generating units (“CGU”)).
In assessing value in use, the estimated future cash flows expected to be generated by the asset are discounted
to their present value using a pre-tax discount rate that reflects current market assessments of the time value
of money and the risks specific to the asset. Where the carrying amount of an asset exceeds its recoverable
amount, the asset is written down to its recoverable amount. Impairment losses recognised in respect of a
CGU or groups of CGUs are allocated first to reduce the carrying amount of any goodwill allocated to those
units or groups of units and then, to reduce the carrying amount of the other assets in the unit or groups of
units on a pro-rata basis.
Impairment losses are recognised in profit or loss except for assets that are previously revalued where the
revaluation was taken to other comprehensive income. In this case the impairment is also recognised in other
comprehensive income up to the amount of any previous revaluation.
An assessment is made at each reporting date as to whether there is any indication that previously recognised
impairment losses may no longer exist or may have decreased. A previously recognised impairment loss is
reversed only if there has been a change in the estimates used to determine the asset’s recoverable amount
since the last impairment loss was recognised. If that is the case, the carrying amount of the asset is increased
to its recoverable amount. That increase cannot exceed the carrying amount that would have been determined,
net of depreciation, had no impairment loss been recognised previously. Such reversal is recognised in profit
or loss. Impairment loss on goodwill is not reversed in a subsequent period.
2.14 Financial assets
Financial assets are recognised in the statements of financial position when, and only when, the Group and
the Company become a party to the contractual provisions of the financial instrument.
When financial assets are recognised initially, they are measured at fair value, plus, in the case of financial
assets not at fair value through profit or loss, directly attributable transaction costs.
The Group and the Company determine the classification of their financial assets at initial recognition, and the
categories include financial assets at fair value through profit or loss and loans and receivables.
(a) Financial assets at fair value through profit or loss
Financial assets are classified as financial assets at fair value through profit or loss if they are held for
trading or are designated as such upon initial recognition. Financial assets held for trading are derivatives
(including separated embedded derivatives) or financial assets acquired principally for the purpose of
selling in the near term.
Subsequent to initial recognition, financial assets at fair value through profit or loss are measured at fair
value. Any gains or losses arising from changes in fair value are recognised in profit or loss. Net gains
or net losses on financial assets at fair value through profit or loss do not include exchange differences,
interest and dividend income. Exchange differences, interest and dividend income on financial assets
at fair value through profit or loss are recognised separately in profit or loss as part of other losses or
other income.
Financial assets at fair value through profit or loss could be presented as current or non-current. Financial
assets that are held primarily for trading purposes are presented as current whereas financial assets
that are not held primarily for trading purposes are presented as current or non-current based on the
settlement date.