For the financial year ended 31 December 2015
64
HAW PAR CORPORATION LIMITED
2. SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
(h) Impairment of non-financial assets
(1) Goodwill
Goodwill, recognised separately as an intangible asset, is tested annually for impairment and whenever
there is any indication that the goodwill may be impaired.
For the purpose of impairment testing of goodwill, goodwill is allocated to each of the Group’s cash
generating units (“CGU”) expected to benefit from synergies of the business combination.
An impairment loss is recognised when the carrying amount of CGU, including the goodwill, exceeds the
recoverable amount of the CGU. Recoverable amount of the CGU is the higher of the CGU’s fair value less
cost to sell and value-in-use.
The total impairment loss of a CGU is allocated first to reduce the carrying amount of goodwill allocated
to the CGU and then to the other assets of the CGU pro-rata on the basis of the carrying amount of each
asset in the CGU.
An impairment loss on goodwill is recognised in profit or loss and is not reversed in a subsequent period.
(2) Intangible assets, Property, plant and equipment and Investments in subsidiaries and associated companies
Intangible assets, property, plant and equipment and investments in subsidiaries and associated companies
are reviewed for impairment whenever there is any objective evidence or indication that these assets may
be impaired.
For the purpose of impairment testing of these assets, recoverable amount (i.e. the higher of the fair value
less cost to sell and value in use) is determined on an individual asset basis unless the asset does not
generate cash inflows that are largely independent of those from other assets. If this is the case, recoverable
amount is determined for the CGU to which the asset belongs.
If the recoverable amount of the asset (or CGU) is estimated to be less than its carrying amount, the carrying
amount of the asset (or CGU) is reduced to its recoverable amount.
The difference between the carrying amount and recoverable amount is recognised as an impairment loss
in profit or loss.
An impairment loss for an asset other than goodwill is reversed if, and 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.
The carrying amount of an asset other than goodwill is increased to its revised recoverable amount, provided
that this amount does not exceed the carrying amount that would have been determined (net of accumulated
amortisation or depreciation) had no impairment loss been recognised for the asset in prior years.
A reversal of impairment loss for an asset other than goodwill is recognised in profit or loss.
NOT E S TO T H E F I NAN C I A L S TAT EME N T S
(CONTINUED)
