Notes to the Financial Statements
(Cont’d)
For the financial year ended 30 April 2016
(In Singapore Dollar)
STAMFORD TYRES CORPORATION LIMITED
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DRIVING IT UP
2.
Summary of significant accounting policies (cont’d)
2.7
Property, plant and equipment (cont’d)
An item of property, plant and equipment is derecognised upon disposal or when no future economic
benefits are expected from its use or disposal. Any gain or loss arising on de-recognition of the asset is
included in profit or loss in the year the asset is derecognised.
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.
