China Communications Services Corporation Limited Annual Report 2015
113
NOTES TO THE
CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 December 2015
2. SIGNIFICANT ACCOUNTING POLICIES
(continued)
(l) Impairment of assets
(continued)
(ii) Impairment of other assets
Internal and external sources of information are reviewed at each end of the reporting period to identify
indications that the following assets may be impaired or, except in the case of goodwill, an impairment loss
previously recognised no longer exists or may have decreased:
— property, plant and equipment;
— investment properties;
— construction in progress;
— lease prepayments;
— goodwill; and
— other intangible assets.
If any such indication exists, the asset’s recoverable amount is estimated. In addition, for goodwill, intangible
assets that are not yet available for use and intangible assets that have indefinite useful lives, the recoverable
amount is estimated annually whether or not there is any indication of impairment.
— Calculation of recoverable amount
The recoverable amount of an asset is the greater of its fair value less costs of disposal and value in use.
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 time value of money and the risks
specific to the asset for which the future cash flow estimates have not been adjusted. Where an asset
does not generate cash inflows largely independent of those from other assets, the recoverable amount is
determined for the smallest group of assets that generates cash inflows independently (i.e. a cash-
generating unit).
— Recognition of impairment losses
An impairment loss is recognised in profit or loss if the carrying amount of an asset, or the cash-
generating unit to which it belongs, exceeds its recoverable amount.
Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying
amount of any goodwill allocated to the cash-generating unit (or group of units) and then, to reduce the
carrying amount of the other assets in the unit (or group of units) on a pro rata basis, except that the
carrying value of an asset will not be reduced below its individual fair value less costs of disposal, or value
in use, if determinable or zero.
— Reversals of impairment losses
In respect of assets other than goodwill, an impairment loss is reversed if there has been a favourable
change in the estimates used to determine the recoverable amount. An impairment loss in respect of
goodwill is not reversed.
A reversal of impairment losses is limited to the asset’s carrying amount that would have been determined
had no impairment loss been recognised in prior years. Reversals of impairment losses are credited to
profit or loss in the year in which the reversals are recognised.
