54
TEHO INTERNATIONAL INC LTD.
Annual Report 2015
3 SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
3.9 Impairment (cont’d)
(ii) Non-financial assets
The carrying amounts of the Group’s non-financial assets, other than development
properties, inventories and deferred tax assets, are reviewed at each reporting date to
determine whether there is any indication of impairment. If any such indication exists,
then the asset’s recoverable amount is estimated. For goodwill, and intangible assets
that have indefinite useful lives or that are not yet available for use, the recoverable
amount is estimated each year at the same time. An impairment loss is recognised if
the carrying amount of an asset or its related cash-generating unit (CGU) exceeds its
estimated recoverable amount.
The recoverable amount of an asset or CGU is the greater of its value in use and its
fair value less costs to sell. In assessing value in use, the estimated future cash flows
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 or
CGU. For the purpose of impairment testing, assets that cannot be tested individually
are grouped together into the smallest group of assets that generates cash inflows
from continuing use that are largely independent of the cash inflows of other assets
or CGUs. Subject to an operating segment ceiling test, for the purposes of goodwill
impairment testing, CGUs to which goodwill has been allocated are aggregated so
that the level at which impairment testing is performed reflects the lowest level at
which goodwill is monitored for internal reporting purposes. Goodwill acquired in a
business combination is allocated to groups of CGUs that are expected to benefit
from the synergies of the combination.
The Group’s corporate assets do not generate separate cash inflows and are utilised
by more than one CGU. Corporate assets are allocated to CGUs on a reasonable and
consistent basis and tested for impairment as part of the testing of the CGU to which
the corporate asset is allocated.
Impairment losses are recognised in profit or loss. Impairment losses recognised in
respect of CGUs are allocated first to reduce the carrying amount of any goodwill
allocated to the CGU (group of CGUs), and then to reduce the carrying amounts of
the other assets in the CGU (group of CGUs) on a pro rata basis.
3 SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
3.9 Impairment (cont’d)
(ii) Non-financial assets
An impairment loss in respect of goodwill is not reversed. In respect of other assets,
impairment losses recognised in prior periods are assessed at each reporting date for
any indications that the loss has decreased or no longer exists. An impairment loss is
reversed if there has been a change in the estimates used to determine the recoverable
amount. An impairment loss is reversed only to the extent that the asset’s carrying
amount does not exceed the carrying amount that would have been determined, net
of depreciation or amortisation, if no impairment loss had been recognised.
Goodwill that forms part of the carrying amount of an investment in an associate
is not recognised separately, and therefore is not tested for impairment separately.
Instead, the entire amount of the investment in an associate is tested for impairment
as a single asset when there is objective evidence that the investment in an associate
may be impaired.
3.10 Employee benefits
(i) Defined contribution plans
A defined contribution plan is a post-employment benefit plan under which an entity
pays fixed contributions into a separate entity and will have no legal or constructive
obligation to pay further amounts. Obligations for contributions to defined contribution
pension plans are recognised as an employee benefit expense in profit or loss in the
periods during which related services are rendered by employees.
(ii) Short-term employee benefits
Short-term employee benefit obligations are measured on an undiscounted basis
and are expensed as the related service is provided. A liability is recognised for
the amount expected to be paid under short-term cash bonus or profit-sharing
plans if the Group has a present legal or constructive obligation to pay this amount
as a result of past service provided by the employee, and the obligation can be
estimated reliably.
NOTES TO THE
FINANCIAL STATEMENTS
Year ended 30 June 2015
