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The Next Generation of Growth
79
NOTES TO THE FINANCIAL STATEMENTS
For the Financial Year ended 30 June 2014
3.
Significant accounting judgements, estimates and assumptions (cont’d)
3.2
Key sources of estimation uncertainty (cont’d)
Allowance for impairment loss on trade receivables
Where receivables are outstanding beyond the normal trading terms, the likelihood of the recovery of these receivables
is assessed by management. Due to the large number of debtors, this assessment is based on supportable past
collection history and historical write-offs of bad debts. In addition, there are credit control departments in place
within the Group to perform recovery procedures and bad debt assessment on a regular and structured basis. When
the credit control departments have exhausted all avenues of recovering outstanding debts, appropriate allowances for
impairment loss or write-off of trade receivables will be made. Details of the impairment loss allowance are outlined in
Note 16.
Revaluation of investment properties
The Group carries its investment properties at fair value, with changes in fair values being recognised in profit or loss.
The Group engaged independent valuation specialists to determine the fair value of the investment properties as at 30
June 2014.
The key assumptions used to determine the fair value of the investment properties are further explained in Note 13.
Impairment of non-financial assets
An impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount,
which is the higher of its fair value less costs to sell and its value in use. The fair value less costs to sell calculation is
based on available data from binding sales transactions in an arm’s length transaction of similar assets or observable
market prices less incremental costs for disposing the asset. The value in use calculation is based on discounted
cash flow model. The cash flows are derived from the budget for the next five years and do not include restructuring
activities that the Group is not yet committed to or significant future investments that will enhance the asset’s
performance of the cash generating unit being tested. The recoverable amount is most sensitive to the discount rate
used for the discounted cash flow model as well as the expected future cash inflows and the growth rate used for the
extrapolation purposes.
4.
Revenue
Group
2014
2013
$’000
$’000
Rendering of services
43,578
31,302
Interest income on long-term trade receivables
5,380
3,400
Sale of goods
129
–
49,087
34,702
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