ENRICHING LIVES EXPANDING HORIZONS - Maxis

128
Financial Statements
NOTES TO THE
FINANCIAL STATEMENTS
31 December 2011
Continued
3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(g) Impairment of assets
(i) Non-financial assets
Assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment. Assets
that have a finite economic useful life are subject to amortisation and are reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised
for the amount by which the carrying amount of the asset exceeds its recoverable amount. The recoverable amount is
the higher of an asset’s fair value less costs to sell and 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). Nonfinancial
assets other than goodwill that suffered impairment are reviewed for possible reversal of the impairment at
each reporting date.
Any impairment loss is charged to the income statement. Impairment losses on goodwill are not reversed. In respect of
other assets, any subsequent increase in recoverable amount is recognised in the income statement to the extent that
the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation
and amortisation, if no impairment loss had been recognised.
(ii) Financial assets
Financial assets carried at amortised cost
Financial assets are impaired when there is objective evidence as a result of one or more events that the present value
of estimated discounted future cash flows is lower than the carrying value. Any impairment losses are recognised
immediately in the income statement.
Financial assets are continuously monitored and allowances applied against financial assets consist of both specific
impairments and collective impairments based on the Group’s historical loss experiences for the relevant aged category
and taking into account general economic conditions. Historical loss experience allowances are calculated by line of
business in order to reflect the specific nature of the financial assets relevant to that line of business.
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 reversal of the previously recognised impairment loss is
recognised in the income statement.
Financial assets classified as available-for-sale
Significant or prolonged decline in fair value below cost and significant financial difficulties of the issuer or obligor are
considerations to determine whether there is objective evidence that investment securities classified as availablefor-sale
financial assets are impaired. 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 income statement, is transferred from equity to income statement.
Impairment losses in the income statement on available-for-sale equity investments are not reversed through the income
statement in the subsequent period. Increase in fair value, if any, subsequent to impairment loss is recognised in other
comprehensive income.