68
FRONTKEN CORPORATION BERHAD
(651020-T)
ANNUAL REPORT 2014
NOTES TO THE
FINANCIAL STATEMENTS
(cont’d)
3.
SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
Impairment
(i)
Impairment of Financial Assets
All financial assets (other than those categorised at fair value through profit or loss) are assessed at the
end of each reporting period whether there is any objective evidence of impairment as a result of one or
more events having an impact on the estimated future cash flows of the asset. For an equity instrument,
a significant or prolonged decline in the fair value below its cost is considered to be objective evidence
of impairment.
An impairment loss in respect of held-to-maturity investments and loans and receivables financial
assets is recognised in profit or loss and is measured as the difference between the asset’s carrying
amount and the present value of estimated future cash flows, discounted at the financial asset’s original
effective interest rate.
An impairment loss in respect of available-for-sale financial assets is recognised in profit or loss and
is measured as the difference between its cost (net of any principal payment and amortisation) and its
current fair value, less any impairment loss previously recognised in the fair value reserve. In addition,
the cumulative loss recognised in other comprehensive income and accumulated in equity under fair
value reserve, is reclassified from equity to profit or loss.
With the exception of available-for-sale equity instruments, if, in a subsequent period, the amount of
the impairment loss decreases and the decrease can be related objectively to an event occurring after
the impairment was recognised, the previously recognised impairment loss is reversed through profit or
loss to the extent that the carrying amount of the financial asset at the date the impairment is reversed
does not exceed what the amortised cost would have been had the impairment not been recognised.
In respect of available-for-sale equity instruments, impairment losses previously recognised in profit
or loss are not reversed through profit or loss. Any increase in fair value subsequent to an impairment
loss made is recognised in other comprehensive income.
(ii)
Impairment of Non-Financial Assets
The carrying values of assets, other than those to which MFRS 136 - 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. The recoverable amount of the assets is the higher of the assets’ fair
value less costs to sell and their value in use, which is measured by reference to discounted future cash
flow.
An impairment loss is recognised in profit or loss immediately.
In respect of 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.
