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AfrAsia Bank Limited and its Group Entities
Annual Report 2015
page 193
noteS to the finanCial StatementS
for the year ended 30 June 2015
2. ACCOUNTING POLICIES (CONTINUED)
2.2 Significant accounting judgements and estimates (Continued)
(b) Estimates and assumptions (Continued)
Impairment of non-financial assets
An impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs to sell
and its value in use. The fair value less costs to sell calculation is based on available data from binding sales transactions in an arm’s length transaction of similar assets
or observable market prices less incremental costs for disposing of the asset. The value in use calculation is based on a discounted cash flow model. The cash flows are
derived from the budget for the next five years and do not include restructuring activities that the Group is not yet committed to or significant future investments that will
enhance the asset’s performance of the cash generating unit being tested. The recoverable amount is most sensitive to the discount rate used for the discounted cash
flow model as well as the expected future cash inflows and the growth rate used for extrapolation purposes. The key assumptions used to determine the recoverable
amount for the different CGU’s, including sensitivity analysis, are disclosed and further explained in Note 20.
2.3 Changes in accounting policies and disclosures
New and amended standards and interpretations
The accounting policies adopted are consistent with those of the previous financial year, except for the following amendments to IFRS effective as of 1 July 2014:
Effective for accounting period beginning on or after
IAS 32 Financial Instruments: Presentation – Offsetting Financial Assets and Financial Liabilities
1 January 2014
Investment Entities (Amendments to IFRS 10, IFRS 12 and IAS 27)
1 January 2014
Recoverable Amount Disclosures for Non-Financial Assets (Amendments to IAS 36)
1 January 2014
Novation of Derivatives and Continuation of Hedge Accounting (Amendments to IAS 39)
1 January 2014
Defined Benefit Plans: Employee Contributions (Amendments to IAS 19)
1 July 2014
Annual Improvements 2010-2012 Cycle
1 July 2014
Annual Improvements 2011-2013 Cycle
1 July 2014
IFRIC 21 Levies
1 January 2014
IAS 32 Financial Instruments: Presentation – Offsetting Financial Assets and Financial Liabilities – effective 1 January 2014
This amendment to IAS 32 Financial Instruments: Presentation was made to clarify certain aspects because of diversity in application of the requirements on offsetting
thereby focusing on four main areas:
the meaning of ‘currently has a legally enforceable right of set-off’;
the application of simultaneous realisation and settlement;
the offsetting of collateral amounts; and
the unit of account for applying the offsetting requirements.
This amendment had no impact on the financial position or performance of the Group.