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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 the 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
