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CORDLIFE GROUP LIMITED
| ANNUAL REPORT 2015
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2015
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
2.13 Financial instruments
(Continued)
(b)
Financial liabilities
(Continued)
Derecognition
A financial liability is derecognised when the obligation under the liability is discharged or
cancelled or expires. When an existing financial liability is replaced by another from the same
lender on substantially different terms, or the terms of an existing liability are substantially
modified, such an exchange or modification is treated as a derecognition of the original liability
and the recognition of a new liability, and the difference in the respective carrying amounts is
recognised in profit or loss.
(c)
Offsetting of financial assets and financial liabilities
Financial assets and financial liabilities are offset and the net amount is presented in the
statements of financial position, when and only when, there is a currently enforceable legal
right to set off the recognised amounts and there is an intention to settle on a net basis, or to
realise the assets and settle the liabilities simultaneously.
2.14 Impairment of financial assets
The Group assesses at each reporting date whether there is any objective evidence that a financial
asset is impaired.
Financial assets carried at amortised cost
For financial assets carried at amortised cost, the Group first assesses whether objective evidence of
impairment exists individually for financial assets that are individually significant, or collectively for
financial assets that are not individually significant. If the Group determines that no objective evidence
of impairment exists for an individually assessed financial asset, whether significant or not, it includes
the asset in a group of financial assets with similar credit risk characteristics and collectively assesses
them for impairment. Assets that are individually assessed for impairment and for which an impairment
loss is, or continues to be recognised are not included in a collective assessment of impairment.
If there is objective evidence that an impairment loss on financial assets carried at amortised cost
has been incurred, the amount of the 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. If a loan has a variable interest rate, the discount rate for measuring
any impairment loss is the current effective interest rate. The carrying amount of the asset is reduced
through the use of an allowance account. The impairment loss is recognised in profit or loss.
When the asset becomes uncollectible, the carrying amount of impaired financial assets is reduced
directly or if an amount was charged to the allowance account, the amounts charged to the allowance
account are written off against the carrying value of the financial asset.
