Singapore Press Holdings annual report 2011 Singapore Press ...

Notes to the
Financial StatementS
August 31, 2011
105
2. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(j)
Financial assets (cont’d)
(iv)
Subsequent measurement
Available-for-sale financial assets and financial assets at fair value through profit or loss are
subsequently carried at fair value. Loans and receivables are subsequently carried at amortised
cost using the effective interest method less accumulated impairment losses.
Gains and losses arising from changes in the fair values of financial assets at fair value
through profit or loss, including the effects of currency translation, interest and dividends,
are recognised in the income statement in the period in which they arise. Changes in the
fair value of monetary assets denominated in foreign currencies and classified as
available-for-sale are analysed into currency translation differences resulting from changes
in the amortised cost of the asset and other changes. The currency translation differences
are recognised in the income statement and other changes are recognised in other
comprehensive income. Changes in fair values of non-monetary assets that are classified as
available-for-sale are recognised in other comprehensive income, together with the related
currency translation differences.
Interest on available-for-sale financial assets, calculated using the effective interest method,
is recognised in the income statement. Dividends on available-for-sale equity securities are
recognised in the income statement when the Group’s right to receive payment is established.
When financial assets classified as available-for-sale are sold or impaired, the accumulated
fair value adjustments recognised in the fair value reserve within equity are included in the
income statement.
(v)
Impairment
The Group assesses at each balance sheet date whether there is objective evidence that
a financial asset or a group of financial assets is impaired and recognises an allowance for
impairment when such evidence exists.
• Loans and receivables
An allowance for impairment of loans and receivables is recognised when there is
objective evidence that the Group will not be able to collect all amounts due according
to the original terms of the receivables. Significant financial difficulties of the debtor,
probability that the debtor will enter bankruptcy or financial reorganisation, and
default or delinquency in payments are objective evidence that these financial assets
are impaired. The carrying amount of these assets is reduced through the use of
an impairment allowance account which is calculated as the difference between the
carrying amount and the present value of estimated future cash flows, discounted
at the original effective interest rate. The amount of the allowance for impairment
is recognised in the income statement. When the asset becomes uncollectible,
it is written-off against the allowance account. Subsequent recoveries of amounts
previously written-off are recognised in the income statement.
The allowance for impairment loss account is reduced through the income statement
in a subsequent period when the amount of impairment loss decreases and the related
decrease can be objectively measured. The carrying amount of the asset previously
impaired is increased to the extent that the new carrying amount does not exceed the
amortised cost, had no impairment been recognised in prior periods.