Annual Report 2011 - Food Junction

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Notes to the Financial Statements (cont’d)
31 December 2011
2. Summary of significant accounting policies (cont’d)
2.10 Impairment of non-financial assets (cont’d)
Impairment losses are recognised in profit or loss in those expense categories consistent with the
function of the impairment asset.
For assets excluding goodwill, 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.
If such indication exists, the Group estimates the asset’s or cash-generating unit’s recoverable amount.
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 be recognised previously. Such reversal is recognised in profit or loss.
2.11 Subsidiary companies
A subsidiary company is an entity over which the Group has the power to govern the financial and
operating policies so as to obtain benefits from its activities. The Group generally has such power
when it directly or indirectly holds more than 50% of the issued share capital, or controls more than
half of the voting power, or controls the composition of the Board of Directors.
In the Company’s separate financial statements, investment in subsidiary companies are accounted for
at cost less impairment losses.
2.12 Financial assets
Initial recognition and measurement
Financial assets are recognised when, and only when, the Group becomes a party to the contractual
provisions of the financial instrument. The Group determines the classification of its financial assets at
initial recognition.
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.
Subsequent measurement
The subsequent measurement of financial assets depends on their classification as follows:
Loans and receivables
Non-derivative financial assets with fixed or determinable payments that are not quoted in an active
market are classified as loans and receivables. Subsequent to initial recognition, loans and receivables
are measured at amortised cost using the effective interest method, less impairment. Gains and losses
are recognised in the profit or loss when the loans and receivables are derecognised or impaired, as
well as through the amortisation process.
Derecognition
A financial asset is derecognised where the contractual right to receive cash flows from the asset
has expired. On derecognition of a financial asset in its entirety, the difference between the carrying
amount and the sum of the consideration received and any cumulative gain or loss that has been
recognised in other comprehensive income is recognised in profit or loss.
All regular way purchases and sales of financial assets are recognised or derecognised on the trade
date i.e., the date that the Group commits to purchase or sell the asset. Regular way purchases
or sales are purchases or sales of financial assets that require delivery of assets within the period
generally established by regulation or convention in the marketplace concerned.
Annual Report