Page 84 - Annual Report 2021

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nOTES TO THE FInanCIaL STaTEmEnTS

5.10 IMPAIRMENT

(a) impairment of Financial assets
All financial assets (except for financial assets measured at fair value through profit or loss) are assessed for
impairment at each reporting date when there is an objective evidence of impairment.

For a financial asset measured at amortised cost, the impairment loss is the difference between the financial
asset’s carrying amount and the present value of estimated cash flows discounted at the financial asset’s
original effective rate.

For a financial asset measured at cost less impairment, the impairment loss is the difference between the
financial asset’s carrying amount and the best estimate of the amount that would be received for the financial
asset if it were to be sold at the reporting date.

All impairment losses are recognised in profit or loss immediately.

If, in a subsequent period, the amount of an impairment loss decreases and the decrease can be related
objectively to an event occurring after the impairment loss was recognised, the previous recognised
impairment loss is reversed to the extent that the carrying amount of the financial asset does not exceed its
amortised cost at the reversal date. The amount of impairment reversal is recognised in profit or loss.

(b) impairment of non-financial assets
The carrying values of non-financial assets, other than those to which Section 27 - Impairment of Assets does
not apply, are reviewed at the end of each reporting period for impairment when there is an indication that
the assets might be impaired.

Impairment is measured by comparing the carrying values of the assets with their recoverable amounts.
When the carrying amount of an asset exceeds its recoverable amount, the asset is written down to its
recoverable amount and an impairment loss shall be recognised. The recoverable amount of an asset is the
higher of the asset’s fair value less costs to sell and its value in use, which is measured by reference to
discounted future cash flows 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 it is not possible to estimate the recoverable
amount of an individual asset, the Group determines the recoverable amount of the cash-generating unit to
which the asset belongs. Goodwill acquired in a business combination is, from the acquisition date, allocated
to each of the cash-generating unit of the Group that is expected to benefit from the synergies of the
combination, irrespective of whether other assets or liabilities of the acquire are assigned to those units.

An impairment loss is recognised in profit or loss. Any impairment loss recognised in respect of a cash-
generating unit is allocated first to reduce the carrying amount of any goodwill allocated to the cash-
generating unit and then to reduce the carrying amounts of the other assets in the cash-generating unit on a
pro rata basis.

In respect to non-financial assets other than goodwill, when there is a change in the estimates used to
determine the recoverable amount, a subsequent increase in the recoverable amount of an asset is treated as
a reversal of the previous impairment loss and is recognised to the extent of the carrying amount of the asset
that would have been determined (net of amortisation and depreciation) had no impairment loss been
recognised. The reversal is recognised in profit or loss immediately.

84 UM Holdings Group