KIM HENG OFFSHORE & MARINE HOLDINGS LIMITED
ANNUAL REPORT 2014
68
NOTES
TO THE FINANCIAL STATEMENTS
3
SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
3.8 Impairment (Cont’d)
(ii) Non-financial assets
The carrying amounts of the Group’s non-financial assets are reviewed at each reporting
date to determine whether there is any indication of impairment. If any such indication exists,
then the asset’s recoverable amount is estimated. An impairment loss is recognised if the
carrying amount of an asset or its related cash-generating unit (“CGU”) exceeds its estimated
recoverable amount.
The recoverable amount of an asset or CGU is the greater of its value in use and its fair value
less costs to sell. 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 CGU. 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 CGU.
Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of
CGUs are allocated to reduce the carrying amounts of assets in the CGU on a
pro rata
basis.
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.
3.9 Employee benefits
(i)
Defined contribution plans
A defined contribution plan is a post-employment benefit plan under which an entity pays fixed
contributions into a separate entity and will have no legal or constructive obligation to pay
further amounts. Obligations for contributions to defined contribution plans are recognised as
an employee benefit expense in profit or loss in the periods during which services are rendered
by employees.
(ii) Short-term employee benefits
Short-term employee benefit obligations are measured on an undiscounted basis and are
expensed as the related service is provided. A liability is recognised for the amount expected
to be paid under short-term cash bonus or profit-sharing plans if the Group has a present
legal or constructive obligation to pay this amount as a result of past service provided by the
employee, and the obligation can be estimated reliably.
(iii) Employee leave entitlement
Employee entitlements to annual leave are recognised when they accrue to employees.
A provision is made for the estimated liability for leave as a result of services rendered by
employees up to the reporting date.
