TAN CHONG MOTOR HOLDINGS BERHAD
Annual Report 2014
65
NOTES TO THE FINANCIAL STATEMENTS
2.
Significant accounting policies (continued)
(j) Impairment (continued)
(ii) Other assets (continued)
For the purpose of impairment testing, assets 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 units. Subject to an operating segment ceiling test, for the purpose of goodwill
impairment testing, cash-generating units to which goodwill has been allocated are aggregated so that the
level at which impairment testing is performed reflects the lowest level at which goodwill is monitored for
internal reporting purposes. The goodwill acquired in a business combination, for the purpose of impairment
testing, is allocated to group of cash-generating units that are expected to benefit from the synergies of the
combination.
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.
An impairment loss is recognised if the carrying amount of an asset or its related cash-generating unit
exceeds its estimated recoverable amount.
Impairment losses are recognised in the profit or loss. Impairment losses recognised in respect of cash-
generating units are allocated first to reduce the carrying amount of any goodwill allocated to the cash-
generating units (group of cash-generating units) and then to reduce the carrying amounts of the other
assets in the cash-generating unit (groups of cash-generating units) on a
pro rata
basis.
An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses
recognised in prior periods are assessed at the end of each reporting period 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 since the last impairment loss was recognised. 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. Reversals of impairment losses are credited to profit or loss in the financial year in which
the reversals are recognised.
(k) Equity instrument
Instruments classified as equity are measured at cost on initial recognition and are not remeasured subsequently.
(i)
Issue expenses
Costs directly attributable to the issue of instruments classified as equity are recognised as a deduction from
equity.
(ii) Ordinary shares
Ordinary shares are classified as equity.
(iii) Repurchase, disposal and reissue of share capital (treasury shares)
When share capital recognised as equity is repurchased, the amount of the consideration paid, including
directly attributable costs, net of any tax effects, is recognised as a deduction from equity. Repurchased
shares that are not subsequently cancelled are classified as treasury shares in the statement of changes in
equity.
