China Communications Services Corporation Limited Annual Report 2015
112
NOTES TO THE
CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 December 2015
2. SIGNIFICANT ACCOUNTING POLICIES
(continued)
(l) Impairment of assets
(continued)
(i) Impairment of investments in debt and equity securities and receivables
(continued)
If any such evidence exists, any impairment loss is determined and recognised as follows:
— For investment in associate recognised using the equity method (see note 2(c)(iv)), the impairment loss is
measured by comparing the recoverable amount of the investment as a whole with its carrying amount in
accordance with note 2(l)(ii). The impairment loss is reversed if there has been a favourable change in the
estimates used to determine the recoverable amount in accordance with note 2(l)(ii).
— For unquoted equity securities carried at cost, the amount of the impairment loss is measured as the
difference between the asset’s carrying amount and the present value of the estimated future cash flows
discounted at the current market rate of return for a similar financial asset. Such impairment loss will not
be reversed in subsequent periods.
— For trade receivables and other financial assets carried at amortised cost, the amount of the impairment
loss recognised is the difference between the asset’s carrying amount and the present value of the
estimated future cash flows discounted at the financial asset’s original effective interest rate.
If in a subsequent period the amount of an impairment loss decreases and the decrease can be linked
objectively to an event occurring after the impairment loss was recognised, the impairment loss is
reversed through profit or loss. A reversal of an impairment loss shall not result in the asset’s carrying
amount exceeding that which would have been determined had no impairment loss been recognised in
prior years.
— For available-for-sale securities carried at fair value that is considered to be impaired, the cumulative loss
that has been recognised in the fair value reserve is reclassified to profit or loss. The amount of the
cumulative loss that is recognised in profit or loss is the difference between the acquisition cost (net of
any principal repayment and amortisation) and current fair value, less any impairment loss on that asset
previously recognised in profit or loss.
Impairment losses recognised in profit or loss in respect of available for- sale equity securities carried at
fair value are not reversed through profit or loss. Any subsequent increase in the fair value of such assets
is recognised in other comprehensive income.
Impairment losses in respect of available-for-sale debt securities are reversed if the subsequent increase in
fair value can be objectively related to an event occurring after the impairment loss was recognised.
Reversals of impairment losses in such circumstances are recognised in profit or loss.
The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with
the exception of trade debtors and bills receivable, where the carrying amount is reduced through the use of an
allowance account. Changes in the carrying amount of the allowance account are recognised in profit or loss.
When trade debtors and bills receivable are considered uncollectible, it is written off against the allowance
account. Subsequent recoveries of amounts previously written off are credited to profit or loss.
