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NOTES TO THE FINANCIAL STATEMENTS
31 MARCH 2018
fInanCIal StatementS
2.
Significant accounting policies (cont’d.)
2.3 Summary of significant accounting policies (cont’d.)
(n) Leases (cont’d.)
(i)
As lessee (cont’d.)
Leased assets are depreciated over the estimated useful life of the asset. However, if there is no reasonable
certainty that the Group will obtain ownership by the end of the lease term, the asset is depreciated over the
shorter of the estimated useful life and the lease term.
Operating lease payments are recognised as an expense on a straight-line basis over the term of the lease
term. The aggregate benefit of incentives provided by the lessor is recognised as a reduction of rental
expense over the lease term on a straight-line basis.
(ii) As lessor
Leases where the Group and the Company retain substantially all the risks and rewards of ownership of the
asset are classified as operating leases. Initial direct costs incurred in negotiating an operating lease are
added to the carrying amount of the leased asset and recognised over the lease term on the same basis as
rental income. The accounting policy for rental income is set-out in Note 2.3(d)(ii).
(o) Impairment of non-financial assets
The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any
such indication exists, or when an annual impairment assessment for an asset is required, the Group makes an
estimate of the asset’s recoverable amount.
An asset’s recoverable amount is the higher of an asset’s fair value less costs to sell and its 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 (“CGU”)).
In assessing value in use, the estimated future cash flows expected to be generated by the asset are discounted
to their present value using a pre-tax discount rate that reflects current market assessments of the time value of
money and the risks specific to the asset. Where the carrying amount of an asset exceeds its recoverable amount,
the asset is written down to its recoverable amount. Impairment losses recognised in respect of a CGU or groups
of CGUs are allocated first to reduce the carrying amount of any goodwill allocated to those units or groups of units
and then, to reduce the carrying amount of the other assets in the unit or groups of units on a pro-rata basis.
Impairment losses are recognised in profit or loss except for assets that are previously revalued where the
revaluation was taken to other comprehensive income. In this case the impairment is also recognised in other
comprehensive income up to the amount of any previous revaluation.