N o t e s t o t h e f i n a n c i a l s t a t e m e n t s
Year ended 31 March 2015
3 Significant accounting policies (continued)
(i)
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.
(ii)
Non-financial assets
The carrying amounts of Group’s non-financial assets, other than investment properties and investment
properties under development, are reviewed at each reporting date to determine whether there is any
indication of impairment. If any such indication exists, the assets’ recoverable amounts are estimated.
An impairment loss is recognised in the Statement of Total Return if the carrying amount of an asset or its
cash-generating unit exceeds its recoverable amount. A cash-generating unit is the smallest identifiable asset
group that generates cash flows that are largely independent from other assets and groups. Impairment
losses are recognised in the Statement of Total Return, unless it reverses a previous revaluation credited to
Unitholders’ funds, in which case it is charged to Unitholders’ funds.
ASCENDAS REAL ESTATE INVESTMENT TRUST ANNUAL REPORT 2014/15
