Annual Report 2025 149 Notes to the Financial Statements 31 December 2025 Credit-impaired financial assets At each reporting date, the Group assesses whether financial assets carried at amortised cost are creditimpaired. The Group determined that its financial assets are credit-impaired when: • there is significant financial difficulty of the debtor; • a breach of contract, such as a default or past due event; or • it is becoming probable that the debtor will enter bankruptcy or another financial reorganisation. Presentation of allowance for ECLs in the Statements of Financial Position Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying amount of these assets. (ii) Non-financial assets The carrying amounts of Group’s non-financial assets, other than investment properties, investment properties under development and right of use assets, 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 Consolidated 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 Consolidated Statement of Total Return. Calculation of recoverable amount The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs of disposal. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or cash-generating unit. For the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or cash-generating unit. Reversal of impairment Impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. 3. Material Accounting Policy Information (continued) 3.7 Impairment (continued) (i) Financial assets (continued)
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