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ANNUAL REPORT 2014
3 SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
3.8 Impairment
Financial assets
A financial asset is assessed at each reporting date to determine whether there is any objective evidence that
it is impaired. A financial asset is considered to be impaired if objective evidence indicates that one or more
events have had a negative effect on the estimated future cash flows of that asset.
Individually significant financial assets are tested for impairment on an individual basis. The remaining financial
assets are assessed collectively in groups that share similar credit risk characteristics.
An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference
between its carrying amount, and the present value of the estimated future cash flows discounted at the
original effective interest rate.
All impairment losses are recognised in the statement of total return.
An impairment loss is reversed if the reversal can be related objectively to an event occurring after the
impairment loss was recognised. For financial assets measured at amortised cost, the reversal is recognised
in the statement of total return.
Non-financial assets
The carrying amounts of the Stapled Group’s non-financial assets, other than investment properties, deferred
tax assets and inventories are reviewed at each reporting date to determine whether there is any indication of
impairment. If any such indication exists, the assets’ recoverable amounts are estimated.
The recoverable amount of an asset or cash-generating unit 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. 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 groups of assets (the “cash-generating unit”).
An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its
recoverable amount. A cash-generating unit is the smallest identifiable asset group that generates cash
flows that largely are independent from other assets and groups. Impairment losses are recognised in the
statement of total return.
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 if no
impairment loss had been recognised.
3.9 Unitholders’ funds
Unitholders’ funds of the Stapled Group comprise unitholders’ funds of HBT Group and the H-REIT Group.
Unitholders’ funds are classified as equity.
Issue expenses relate to expenses incurred in connection with the issue of Stapled Securities. The expenses
are deducted directly against the unitholders’ funds.
NOTES TO THE FINANCIAL STATEMENTS
