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Notes to the Financial Statements
Year ended 31 March 2013
F INANCIAL REPORT FY12/13
144 ASCENDAS REAL ESTATE INVESTMENT TRUST
3 Significant accounting policies (continued)
(g) Financial instruments (continued)
(iii) Derivative financial instruments and hedging activities (continued)
Other derivative financial instruments
Changes in the fair value of derivative financial instruments that are not designated as hedging instruments in qualifying
cash flow hedges are recognised in the Statement of Total Return.
(h) Impairment
(i) Non-derivative financial assets
A financial asset not carried at fair value through profit or loss is assessed at the end of each reporting period to determine
whether there is objective evidence that it is impaired. A financial asset is impaired if objective evidence indicates that a loss
event has occurred after the initial recognition of the asset, and that the loss event has a negative effect on the estimated
future cash flows of that asset that can be estimated reliably.
Objective evidence that financial assets are impaired can include default or delinquency by a debtor, restructuring of an
amount due to the Group on terms that the Group would not consider otherwise, indications that a debtor or issuer will
enter bankruptcy, adverse changes in the payment status of borrowers or issuers in the Group, economic conditions that
correlate with defaults or the disappearance of an active market for a security.
Loans and receivables
The Group considers evidence of impairment for loans and receivables at both a specific asset and collective level. All
individually significant loans and receivables are assessed for specific impairment. All individually significant receivables
found not to be specifically impaired are then collectively assessed for any impairment that has been incurred but not yet
identified. Loans and receivables that are not individually significant are collectively assessed for impairment by grouping
together loans and receivables with similar risk characteristics.
In assessing collective impairment, the Group uses historical trends of the probability of default, the timing of recoveries
and the amount of loss incurred, adjusted for the Manager’s judgement as to whether current economic and credit
conditions are such that the actual losses are likely to be greater or less than suggested by historical trends.
An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between
its carrying amount and the present value of the estimated future cash flows, discounted at the asset’s original effective
interest rate. Losses are recognised in the Statement of Total Return and reflected in an allowance account against loans
and receivables. Interest on the impaired asset continues to be recognised. When a subsequent event (e.g. repayment
by a debtor) causes the amount of impairment loss to decrease, the decrease in impairment loss is reversed through the
Statement of Total Return.