Huawei 2014 Annual Report Download - page 71

69Consolidated Financial Statements Summary and Notes
■ For unquoted equity securities carried at
cost, the impairment loss is measured as the
difference between the carrying amount of
the financial asset and the estimated future
cash flows, discounted at the current market
rate of return for a similar financial asset
where the effect of discounting is material.
Impairment losses for equity securities carried
at cost are not reversed.
■ For trade and other current receivables and
other financial assets carried at amortised
cost, the impairment loss is measured as
the difference between the assets' carrying
amount and the present value of estimated
future cash flows, discounted at the financial
assets' original effective interest rate (i.e.
the effective interest rate computed at initial
recognition of these assets), where the effect
of discounting is material. This assessment
is made collectively where these financial
assets share similar risk characteristics,
such as similar past due status, and have
not been individually assessed as impaired.
Future cash flows for financial assets which
are assessed for impairment collectively are
based on historical loss experience for assets
with credit risk characteristics similar to the
collective group.
If in a subsequent period the amount of an
impairment loss decreases and the decrease
can be linked objectively to an event occurring
after the impairment loss was recognised, the
impairment loss is reversed through profit or
loss. A reversal of an impairment loss shall
not result in the asset's carrying amount
exceeding that which would have been
determined had no impairment loss been
recognised in prior years.
■ For available-for-sale securities, the
cumulative loss that has been recognised in
the fair value reserve is reclassified to profit
or loss. The amount of the cumulative loss
that is recognised in profit or loss is the
difference between the acquisition cost (net
of any principal repayment and amortisation)
and current fair value, less any impairment
loss on that asset previously recognised in
profit or loss.
Impairment losses recognised in profit or
loss in respect of available-for-sale equity
securities are not reversed through profit
or loss. Any subsequent increase in the fair
value of such assets is recognised in other
comprehensive income.
Impairment losses in respect of
available-for-sale debt securities are reversed
if the subsequent increase in fair value can be
objectively related to an event occurring after
the impairment loss was recognised. Reversals
of impairment losses in such circumstances
are recognised in profit or loss.
Impairment losses are written off against
the corresponding assets directly, except for
impairment losses recognised in respect of
trade and bills receivable, whose recovery is
considered doubtful but not remote. In this
case, the impairment losses for doubtful debts
are recorded using an allowance account. When
the Group is satisfied that recovery is remote,
the amount considered irrecoverable is written
off against trade and bills receivable directly
and any amounts held in the allowance account
relating to that debt are reversed. Subsequent
recoveries of amounts previously charged to
the allowance account are reversed against
the allowance account. Other changes in the
allowance account and subsequent recoveries
of amounts previously written off directly are
recognised in profit or loss.
ii) Impairment of other assets
Internal and external sources of information are
reviewed at the end of each reporting period to
identify indications that the following assets may