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Summary of significant accounting policies(q)Impairment of Financial AssetsThe Group assesses at each balance sheet date whether there is any objective evidence that a financial asset or a groupof financial assets is impaired.(i)Assets Carried at Amortised CostIf there is objective evidence that an impairment loss on financial assets carried at amortised cost has beenincurred, the amount of the loss is measured as the difference between the asset’s carrying amount and thepresent value of estimated future cash flows discounted at the financial asset’s original effective interest rate.The carrying amount of the asset is reduced through the use of an allowance account. The amount of the loss isrecognised in the profit and loss account.If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectivelyto an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed.Any subsequent reversal of an impairment loss is recognised in the profit and loss account, to the extent that thecarrying value of the asset does not exceed its amortised cost at the reversal date.(ii)(iii)Assets Carried at CostIf there is objective evidence that an impairment loss on a financial asset carried at cost has been incurred, theamount of the loss is measured as the difference between the asset’s carrying amount and the present value ofestimated future cash flows discounted at the current market rate of return for a similar financial asset. Suchimpairment losses are not reversed in subsequent periods.Available-For-Sale Financial AssetsIf an available-for-sale financial asset is impaired, an amount comprising the difference between its cost (net of anyprincipal payment and amortisation) and its current fair value, less any impairment loss previously recognised in theprofit and loss account, is transferred from equity to the profit and loss account. Reversals of impairment loss inrespect of equity instruments are not recognised in the profit and loss account. Reversals of impairment losses ondebt instruments are reversed through the profit and loss account, if the increase in fair value of the instrument canbe objectively related to an event occurring after the impairment loss was recognised in the profit and loss account.(r)Derecognition of Financial AssetsA financial asset is derecognised where the contractual rights to receive cash flows from the asset have expired.On derecognition of a financial asset, the difference between the carrying amount and the sum of the considerationreceived and any cumulative gain or loss that has been recognised directly in equity is recognised in the profit andloss account.(s)ProvisionsProvisions are recognised when the Group has a present legal or constructive obligation as a result of past events, andwhen it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate of theamount can be made.186Summary of significant accounting policiesKeppel Land LimitedReport to Shareholders 2006