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Annual Report 2016
ASIA MEDIA GROUP Berhad
93
Notes to the Financial Statements
(continued)
4. Significant accounting judgements, estimates and assumptions (cont’d)
(c) Impairment of other intangible assets
The Group assess impairment of assets whenever the events or changes in circumstances
indicate that the carrying amount of an asset may be recoverable i.e. the carrying amount
of the asset is more than recoverable amount.
Recoverable amount is measured at the higher of the fair value less cost of disposal for that
asset and its value-in-use. The value-in-use is the net present value of the projected future
cash flows derived from that asset discounted at an appropriate discount rate. Projected
future cash flows are based in the Group’s estimates calculated based on historical, sector
and industry trends, general market and economic conditions changes in technology and
other available information.
As a result of the impairment assessment made by the Directors, an impairment loss of
RM33,031 (2015: RM887,639) has been provided as disclosed in the Note 7 and 17 to
the financial statements.
(d) Impairment of investment in subsidiaries and recoverability of amount owing by
subsidiaries
The Group tests investment in subsidiaries for impairment annually in accordance with
its accounting policy. More regular reviews are performed in events indicate that this is
necessary. The assessment of the net tangible assets of the subsidiaries affects the result
of the impairment test. Cost of investments in subsidiaries which have ceased operations
were impaired up to net assets of the subsidiaries. The impairment made on investment
in subsidiaries entails an impairment of receivables to be made to amount owing by these
subsidiaries.
Significant judgement is required in the estimation of the present value of future cash flows
generated by the subsidiaries, which involve uncertainties and are significantly affected
by assumptions used and judgement made regarding estimates of future cash flows and
discount rates. Changes in assumptions could significantly affect the results of the Group’s
tests for impairment of investment in subsidiaries.