84 / 142
Annual Report 2016
ASIA MEDIA GROUP Berhad
83
Notes to the Financial Statements
(continued)
3.
Summary of significant accounting policies (cont’d)
3.6 Financial assets (cont’d)
(iii) Impairment of financial assets (cont’d)
(1) Trade and other receivables and other financial assets carried at amortised
cost
To determine whether there is objective evidence that an impairment loss on
financial assets has been incurred, the Group and the Company consider factors
such as the probability of insolvency or significant financial difficulties of the
debtor and default or significant delay in payments. For certain categories of
financial assets, such as trade receivables, assets that are assessed not to be
impaired individually are subsequently assessed for impairment on a collective
basis based on similar risk characteristics. Objective evidence of impairment
for a portfolio of receivables could include the Group's or the Company's past
experience of collecting payments, an increase in the number of delayed
payments in the portfolio past the average credit period and observable
changes in national or local economic conditions that correlate with default
on receivables.
If any such evidence exists, the amount of impairment loss is measured as
the difference between the 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 the financial asset is reduced by the impairment loss
directly for all financial assets with the exception of receivables, where the
carrying amount is reduced through the use of an allowance account. When a
receivable becomes uncollectible, it is written off against the allowance account.
If in a subsequent period, the amount of the impairment loss decreases and the
decrease can be related objectively to an event occurring after the impairment
was recognised, the previously recognised impairment loss is reversed to the
extent that the carrying amount of the asset does not exceed its amortised
cost at the reversal date. The amount of reversal is recognised in profit or loss.