Singapore Airlines 2014 Annual Report Download - page 166

Download and view the complete annual report

Please find page 166 of the 2014 Singapore Airlines annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 220

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164
  • 165
  • 166
  • 167
  • 168
  • 169
  • 170
  • 171
  • 172
  • 173
  • 174
  • 175
  • 176
  • 177
  • 178
  • 179
  • 180
  • 181
  • 182
  • 183
  • 184
  • 185
  • 186
  • 187
  • 188
  • 189
  • 190
  • 191
  • 192
  • 193
  • 194
  • 195
  • 196
  • 197
  • 198
  • 199
  • 200
  • 201
  • 202
  • 203
  • 204
  • 205
  • 206
  • 207
  • 208
  • 209
  • 210
  • 211
  • 212
  • 213
  • 214
  • 215
  • 216
  • 217
  • 218
  • 219
  • 220

164
NOTES TO THE FINANCIAL STATEMENTS
31 March 2014
SINGAPORE AIRLINES
22 Intangible Assets (in $ million) (continued)
Impairment testing of landing slots
The carrying value of the landing slots classified under “others” is assessed for impairment annually as the landing slots
have indefinite useful life. The recoverable amount of the landing slots has been determined based on value-in-use
calculations using 8-year cash flow projection approved by Management. A reasonable change to the assumptions used
by Management to determine the impairment required, particularly the discount rate and long-term growth rate, would not
significantly affect the results.
Impairment testing of deferred engine development costs
This relates to the Group’s share of engine development payments made in connection with its participation in aircraft
engine development projects with other companies. As the intangible asset is not yet available for use, an impairment test
has been performed.
The recoverable amount of the cash-generating unit (the aircraft engine development project) has been determined based
on value in use calculations using cash flow projections from business plan approved by Management for the next 48
years. The pre-tax discount rate applied to cash flow projections is 8%.
The calculations of value in use are most sensitive to the following assumptions:
Pre-tax discount rates – Discount rates represent the current market assessment of the risks specific to the cash-generating
unit, regarding the time value of money and individual risks of the underlying assets which have not been incorporated in
the cash flow estimates. The discount rate calculation is based on the specific circumstances of the Group and derived from
its weighted average cost of capital (“WACC”).
Number of engines – Number of engines represent the projected number of aircraft engines expected to be sold upon
completion of the engine development. Projected engine sale is based on current aircraft orders and expectation of the
market development.
A reasonable change to the assumptions used by Management to determine the impairment required, particularly the
discount rate and growth rate, would not significantly affect the results.
23 Subsidiary Companies (in $ million)
The Company
31 March
2014 2013
Investment in subsidiary companies (at cost)
Quoted equity investments # #
Unquoted equity investments 2,031.4 2,055.4
2,031.4 2,055.4
Accumulated impairment loss (9.8) (25.3)
2,021.6 2,030.1
Loans to a subsidiary company 420.5 -
Market value of quoted equity investments 4,210.8 4,123.8
# The value is $1.