Singapore Airlines 2015 Annual Report Download - page 116

Notes to the Financial Statements
31 March 2015
2 Summary of Significant Accounting Policies (continued)
(o) Cash and cash equivalents
Cash and cash equivalents comprise cash on hand, deposits in banks and short-term, highly liquid investments that are
readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
For the purpose of the consolidated statement of cash flows, cash and cash equivalents consist of cash on hand and deposits
in banks. The accounting policy for this category of financial assets is stated in Note 2(l), under loans and receivables.
(p) 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 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 or CGU’s fair value less costs to sell and its value-in-use and is
determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those
from other assets or groups of assets. 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 considered impaired and is written down to its recoverable amount.
For non-financial assets excluding goodwill and those with indefinite lives, an assessment is made at each reporting
date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have
decreased. If such indication exists, the Group estimates the asset’s or CGU’s recoverable amount. A previously recognised
impairment loss is reversed only if there has been a change in the estimates used to determine the asset’s recoverable
amount since the last impairment loss was recognised. If that is the case, the carrying amount of the asset is increased
to its recoverable amount. That increase cannot exceed the carrying amount that would have been determined, net
of depreciation, had no impairment loss been recognised previously. Such reversal is recognised in the profit and loss
account unless the asset is measured at revalued amount, in which case the reversal is treated as a revaluation increase.
(q) Impairment of financial assets
The Group also assesses at the end of each reporting period whether a financial asset or a group of financial assets is impaired.
(i) 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 dierence between the asset’s carrying amount and the present value of
estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial
asset’s original eective interest rate. The carrying amount of the asset is reduced either directly or through the use
of an allowance account. The impairment loss is recognised in the profit and loss account.
When the asset becomes uncollectible, the carrying amount of the impaired financial asset is reduced directly or if
an amount was charged to the allowance account, the amounts charged to the allowance account are written o
against the carrying value of the financial asset.
114 FINANCIAL