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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)
2.14 Impairment of financial assets
(Continued)
To determine whether there is objective evidence that an impairment loss on financial assets has
been incurred, the Group considers factors such as the probability of insolvency or significant financial
difficulties of the debtor and default or significant delay in payments.
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.
Financial assets carried at cost
If there is objective evidence (such as significant adverse changes in the business environment where
the issuer operates, probability of insolvency or significant financial difficulties of the issuer) that an
impairment loss on financial assets carried at 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 current market rate of return for a similar financial asset. Such impairment
losses are not reversed in subsequent periods.
2.15 Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and on hand and short term deposits that are held
for the purpose of meeting short term commitments and not for investment purposes and are readily
convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
2.16 Inventories
Inventories are stated at the lower of cost and net realisable value, determined on a weighted average
cost basis; and mainly consist of materials used in the provision of cord blood and cord lining banking
services.
Where necessary, allowance is provided for damaged, obsolete and slow moving items to adjust the
carrying value of inventories to the lower of cost or net realisable value.
Net realisable value is the estimated selling price in the ordinary course of business less estimated costs
of completion and the estimated costs necessary to make the sale.
