KIM HENG OFFSHORE & MARINE HOLDINGS LIMITED
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Notes to the financial statements
3 Significant accounting policies (Cont’d)
3.8 Impairment (Cont’d)
(ii)
Non-financial assets (Cont’d)
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 related 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.
3.10 Provision
A provision is recognised if, as a result of past event, the Group has a present legal or a constructive obligation
that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle
the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate
that reflects current market assessments of the time value of money and the risks specific to the liability. The
unwinding of the discount is recognised as finance cost.
3.11 Revenue recognition
(i)
Sale of goods
Revenue from the sale of goods in the course of ordinary activities is measured at the fair value of the
consideration received or receivable, net of returns, trade discounts and volume rebates. Revenue is
recognised when persuasive evidence exists, usually in the form of an executed sales agreement, that
the significant risks and rewards of ownership have been transferred to the customer, recovery of the
consideration is probable, the associated costs and possible return of goods can be estimated reliably,
there is no continuing management involvement with the goods, and the amount of revenue can be
measured reliably, then the discount is recognised as a reduction of revenue as the sales are recognised.
The timing of the transfers of risks and rewards varies depending on the individual terms of the contract
of sale.
