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present value of the minimum lease payments. Subsequent
to initial recognition, the asset is accounted for in accordance
with the accounting policy applicable to that asset.
Other leases are operating leases and are not recognized on
the consolidated balance sheet.
2.9 Inventories
Inventories are measured at the lower of cost and net realizable
value. The cost of inventories is based on the first­in first­out
method, and includes expenditure incurred in acquiring the
inventories, production and conversion costs and other costs
incurred in bringing them to their existing location and
condition. The cost of finished goods and work in progress
includes an appropriate share of production overheads based
on normal operating capacity. Net realizable value is the
estimated selling price in the ordinary course of business, less
the estimated costs of completion and selling expenses.
2.10 Impairment
Financial assets
Financial assets are assessed at each reporting date to determine
whether there is any objective evidence that it is impaired.
A financial asset is considered to be impaired if objective
evidence indicates that one or more events have had a negative
effect on the estimated future cash flows of the asset.
Impairment losses in respect of financial assets measured at
amortized cost are calculated as the difference between the
carrying amounts and present values of the estimated future
cash flows discounted at the original effective interest rate.
An impairment loss in respect of an available­for­sale financial
asset is measured by reference to its fair value.
Individually significant financial assets are tested for impairment
on an individual basis. The remaining financial assets are
assessed collectively in groups that share similar credit risk
characteristics. Impairment losses are recognized in profit or
loss. An impairment loss is reversed if the reversal can be
related objectively to an event occurring after the impairment
loss was recognized. For financial assets measured at amortized
cost the reversal is recognized in profit or loss.
Non­financial assets
The carrying amounts of non­financial assets, other than
inventories and deferred tax assets, are reviewed at each
reporting date to determine whether there is any indication
of impairment. If any such indication exists, then the asset’s
recoverable amount is estimated. For goodwill and intangible
assets that have indefinite lives or that are not yet available
for use, the recoverable amount is estimated annually.
The recoverable amount of an asset or cash­generating unit is
the greater of its value in use and its fair value less costs to
sell. In assessing value in use, the estimated future cash flows
are discounted to their present value using a pre­tax discount
rate that reflects current market assessments of the time value
of money and the risks specific to the asset. For the purpose
of impairment testing, assets are grouped at the lowest levels
for which there are separately identifiable cash flows from
continuing use that are largely independent of the cash flows
of other assets or groups of assets (the “cash­generating units”).
For the purpose of impairment testing, the goodwill acquired in
a business combination is allocated to cash­generating units that
are expected to benefit from the synergies of the combination.
An impairment loss is recognized if the carrying amount of
an asset or its cash­generating unit exceeds its estimated
recoverable amount. Impairment losses are recognized in
profit or loss. Impairment losses recognized in respect of
cash­generating units are allocated first to reduce the
carrying amount of any goodwill allocated to the units and
then to reduce the carrying amount of the other assets in the
unit (or group of units) on a pro rata basis.
An impairment loss in respect of goodwill is not reversed.
In respect of other assets, impairment losses recognized
in prior periods are assessed at each reporting date for
indications that the loss has decreased or no longer exists.
An impairment loss is reversed if there has been a change in
the estimates used to determine the recoverable amount.
An impairment loss is reversed only to the extent that the
asset’s carrying amount does not exceed the carrying amount
that would have been determined, net of depreciation or
amortization, if no impairment loss had been recognized.
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