NOTES TO THE FINANCIAL STATEMENTS
31 December 2014
2.
Summary of significant accounting policies (cont’d)
2.11 Financial assets (cont’d)
De-recognition
A financial asset is de-recognised where the contractual right to receive cash flows from the asset has expired. On de-
recognition 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 had been recognised in other comprehensive income is recognised in profit or loss.
Regular way purchase or sale of a financial asset
All regular way purchases and sales of financial assets are recognised or de-recognised 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.
2.12 Cash and cash equivalents
Cash and cash equivalents comprise cash at banks and on hand and fixed deposits that are readily convertible to known amount
of cash and which are subject to an insignificant risk of changes in value.
2.13 Impairment of financial assets
The Group assesses at each reporting date whether there is any objective evidence that a financial asset is impaired.
(a) Financial assets carried at amortised cost
For financial assets carried at amortised cost, the Group first assesses whether objective evidence of impairment exists
individually for financial assets that are individually significant, or collectively for financial assets that are not individually
significant. If the Group determines that no objective evidence of impairment exists for an individually assessed financial
asset, whether significant or not, it includes the asset in a group of financial assets with similar credit risk characteristics
and collectively assesses them for impairment. Assets that are individually assessed for impairment and for which an
impairment loss is, or continues to be recognised are not included in a collective assessment of impairment.
If there is objective evidence that an impairment loss on financial assets carried at amortised cost has been incurred, the
amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated
future cash flows discounted at the financial asset’s original effective interest rate. If a loan has a variable interest rate,
the discount rate for measuring any impairment loss is the current effective interest rate. The carrying amount of the
asset is reduced through the use of an allowance account. The impairment loss is recognised in profit or loss.
Hock Lian Seng Holdings Limited
Annual report 2014
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