Singapore Airlines 2009 Annual Report Download - page 109

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2 Accounting Policies (continued)
(r) Impairment of fi nancial assets (continued)
(i) Assets carried at amortised cost (continued)
To determine whether there is objective evidence that an impairment loss on fi nancial assets has
been incurred, the Group considers factors such as the probability of insolvency or signifi cant
fi nancial diffi culties of the debtor and default or signifi cant delay in payments.
If, in a subsequent period, the amount of the impairment loss decreases and the decrease can
be related objectively to an event occurring after the impairment was recognised, the previously
recognised impairment is reversed to the extent that the carrying amount of the asset does not
exceed its amortised cost at the reversal date. The amount of reversal is recognised in the profi t
and loss account.
(ii) Assets carried at cost
If there is objective evidence (such as signifi cant adverse changes in the business environment
where the issuer operates, probability of insolvency or signifi cant fi nancial diffi culties of the issuer)
that an impairment loss on fi nancial assets carried at 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 fl ows discounted at the current market rate of return for a similar fi nancial
asset. Such impairment losses are not reversed in subsequent periods.
(iii) Available-for-sale fi nancial assets
Signifi cant or prolonged decline in fair value below cost, signifi cant fi nancial diffi culties of the issuer or
obligor, and the disappearance of an active trading market are considerations to determine whether
there is objective evidence that investment securities classifi ed as available-for-sale fi nancial assets
are impaired.
If an available-for-sale asset is impaired, an amount comprising the difference between its cost (net
of any principal repayment and amortisation) and its current fair value, less any impairment loss
previously recognised in the profi t and loss account, is transferred from equity to the profi t and
loss account. Reversals of impairment losses in respect of equity instruments are not recognised
in the profi t and loss account. Reversals of impairment losses on debt instruments are recognised
through the profi t and loss account if the increase in fair value of the debt instrument can be
objectively related to an event occurring after the impairment loss was recognised in the profi t
and loss account.
(s) Financial liabilities
Financial liabilities are recognised on the balance sheet when, and only when, the Group becomes a
party to the contractual provisions of the fi nancial instrument.