annual report 2014
I
Notes to the Financial Statements
31 December 2014 (Cont’d)
71
4.
SIGNIFICANT ACCOUNTING POLICIES (cont’d)
4.8 Financial instruments (Cont’d)
(c)
Equity
An equity instrument is any contract that evidences a residual interest in the assets of the Group and
the Company after deducting all of its liabilities. Ordinary shares are classified as equity instruments.
Ordinary shares are recorded at the nominal value and proceeds in excess of the nominal value of shares
issued, if any, are accounted for as share premium. Both ordinary shares and share premium are classified
as equity. Transaction costs of an equity transaction are accounted for as a deduction from equity, net
of any related income tax benefit. Otherwise, they are charged to profit or loss.
Interim dividend to shareholders are recognised in equity in the period in which they are declared. Final
dividend are recognised upon the approval of shareholders in a general meeting.
The Group measures a liability to distribute non-cash assets as a dividend to the owners of the Company
at fair value of the assets to be distributed. The carrying amount of the dividend is remeasured at the
end of each reporting period and at the settlement date, with any changes recognised directly in equity
as adjustments to the amount of the distribution. On settlement of the transaction, the Group recognises
the difference, if any, between the carrying amount of the assets distributed and the carrying amount of
the liability in profit or loss.
When the Group repurchases its own shares, the shares repurchased would be accounted for using the
treasury stock method.
Where the treasury stock method is applied, the shares repurchased and held as treasury shares shall
be measured and carried at the cost of repurchase on initial recognition and subsequently. It shall not
be revalued for subsequent changes in the fair value or market price of the shares.
The carrying amount of the treasury shares shall be offset against equity in the statement of financial
position. To the extent that the carrying amount of the treasury shares exceeds the share premium
account, it shall be considered as a reduction of any other reserves as may be permitted by the Main
Market Listing Requirements.
No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the own
equity instruments of the Company. If such shares are issued by resale, any difference between the sales
consideration and the carrying amount is shown as a movement in equity.
4.9 Impairment of financial assets
The Group assesses whether there is any objective evidence that a financial asset is impaired at the end of
each reporting period.
Loans and receivables
The Group collectively considers factors such as the probability of bankruptcy or significant financial difficulties
of the receivable, and default or significant delay in payments by the receivable, to determine whether there is
objective evidence that an impairment loss on loans and receivables has occurred. Other objective evidence
of impairment include historical collection rates determined on an individual basis and observable changes in
national or local economic conditions that are directly correlated with the historical default rates of receivables.
If any such objective evidence exists, the amount of impairment loss is measured as the difference between
the financial asset’s carrying amount and the present value of estimated future cash flows discounted at the
financial asset’s original effective interest rate. The impairment loss is recognised in profit or loss. The carrying
amount of loans and receivables are reduced through the use of an allowance account.
