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Annual Report 2013
KPJ HEALTHCARE BERHAD
188
2.
Summary of signi cant accounting policies (continued)
2.15 Impairment of nancial assets
The Group and the Company assess at each reporting date whether there is any objective evidence that a nancial asset is
impaired.
(a)
Trade and other receivables and other nancial assets carried at amortised cost
To determine whether there is objective evidence that an impairment loss on nancial assets has been incurred, the Group
and the Company consider factors such as the probability of insolvency or signi cant nancial dif culties of the debtor and
default or signi cant delay in payments. For certain categories of nancial assets, such as trade receivables, receivables
that are assessed not to be impaired individually are subsequently assessed for impairment on a collective basis based on
similar risk characteristics. Objective evidence of impairment for a portfolio of receivables could include the Group’s and
the Company’s past experience of collecting payments, an increase in the number of delayed payments in the portfolio past
the average credit period and observable changes in national or local economic conditions that correlate with default on
receivables.
If any such evidence exists, the amount of impairment loss is measured as the difference between the asset’s carrying
amount and the present value of estimated future cash ows discounted at the nancial asset’s original effective interest
rate. The impairment loss is recognised in pro t or loss.
The carrying amount of the nancial asset is reduced by the impairment loss directly for all nancial assets with the exception
of receivables, where the carrying amount is reduced through the use of an allowance account. When a receivable becomes
uncollectible, it is written off against the allowance account.
If in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an
event occurring after the impairment was recognised, the previously recognised impairment loss is reversed to the extent
that the carrying amount of the asset does not exceed its amortised cost at the reversal date. The amount of reversal is
recognised in pro t or loss.
(b)
Available-for-sale nancial assets
Signi cant or prolonged decline in fair value below cost, signi cant nancial dif culties of the issuer or obligor, and the
disappearance of an active trading market are considerations to determine whether there is objective evidence that
investment securities classi ed as available-for-sale nancial assets are impaired.
If an available-for-sale nancial asset is impaired, an amount comprising the difference between its cost (net of any principal
payment and amortisation) and its current fair value, less any impairment loss previously recognised in pro t or loss, is
transferred from equity to pro t or loss.
Impairment losses on available-for-sale equity investments are not reversed in pro t or loss in the subsequent periods.
Increase in fair value, if any, subsequent to impairment loss is recognised in other comprehensive income. For available-for-
sale debt investments, impairment losses are subsequently reversed in pro t or loss if an increase in the fair value of the
investment can be objectively related to an event occurring after the recognition of the impairment loss in pro t or loss.
Notes to the
Financial Statements
For the financial year ended 31 December 2013
(continued)