Notes to the Financial Statements
(Cont’d)
For the year ended 30 April 2015
(In Singapore Dollars)
47
STAMFORD TYRES CORPORATION LIMITED
BUILDING ON OUR EXTENSIVE NETWORK
2.
Summary of significant accounting policies (cont’d)
2.8
Impairment of non-financial assets
The Group assesses at each reporting date whether there is an indication that an asset may be impaired.
If any such indication exists, or when annual impairment testing for an asset is required, the Group makes
an estimate of the asset’s recoverable amount.
An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s fair value less costs of
disposal and its value in use and is determined for an individual asset, unless the asset does not generate
cash inflows that are largely independent of those from other assets or group of assets. Where the carrying
amount of an asset or cash-generating unit exceeds its recoverable amount, the asset is considered
impaired and is written down to its recoverable amount.
Impairment losses of continuing operations are recognised in profit or loss, except for assets that are
previously revalued where the revaluation was taken to other comprehensive income. In this case, the
impairment is also recognised in other comprehensive income up to the amount of any previous
revaluation.
A previously recognised impairment loss is reversed only if there has been a change in the estimates
used to determine the asset’s recoverable amount since the last impairment loss was recognised. If that
is the case, the carrying amount of the asset is increased to its recoverable amount. That increase cannot
exceed the carrying amount that would have been determined, net of depreciation, had no impairment
loss been recognised previously. Such reversal is recognised in profit or loss unless the asset is measured at
revalued amount, in which case the reversal is treated as a revaluation increase.
2.9
Subsidiaries
A subsidiary is an investee that is controlled by the Group. The Group controls an investee when it is
exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect
those returns through its power over the investee.
In the Company’s separate financial statements, investments in subsidiary companies are accounted for
at cost less any impairment losses. Details of the subsidiary companies are set out in Note 40.
2.10
Joint ventures and associate
An associate is an entity over which the Group has the power to participate in the financial and operating
policy decisions of the investee but does not have control or joint control of those policies. A joint venture
is a contractual arrangement whereby two or more parties undertake an economic activity that is subject
to joint control, where the strategic financial and operating decisions relating to the activity require the
unanimous consent of the parties sharing control.
The Group account for its investments in associate and joint ventures using the equity method from the
date on which it becomes an associate or joint venture.
On acquisition of the investment, any excess of the cost of the investment over the Group’s share of the
net fair value of the investee’s identifiable assets and liabilities is accounted as goodwill and is included
in the carrying amount of the investment. Any excess of the Group’s share of the net fair value of the
investee’s identifiable assets and liabilities over the cost of the investment is included as income in the
determination of the entity’s share of the associate or joint venture’s profit or loss in the period in which the
investment is acquired.
