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Cordlife Group Limited
Annual Report 2016
Notes to
The Financial Statements
for the financial year ended 30 June 2016
2.
Summary of significant accounting policies (cont’d)
2.10
Impairment of non-financial assets
The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any
such indication exists or when an annual impairment assessment for an asset is required, the Group makes an
estimate of the asset’s recoverable amount.
An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s fair value less costs of
disposal and its value in use and is determined for an individual asset, unless the asset does not generate cash
inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount
of an asset or cash-generating unit exceeds its recoverable amount, the asset is considered impaired and is
written down to its recoverable amount. In assessing value in use, the estimated future cash flows expected
to be generated by the asset are discounted to their present value using a pre-tax discount rate that reflects
current market assessments of the time value of money and the risks specific to the asset. In determining
fair value less costs of disposal, recent market transactions are taken into account, if available. If no such
transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by
valuation multiples or other available fair value indicators. Impairment losses are recognised in profit or loss in
those expense categories consistent with the function of the impaired asset.
An assessment is made at each reporting date as to whether there is any indication that previously recognised
impairment losses may no longer exist or may have decreased. If such indication exists, the Group estimates
the asset’s or cash-generating unit’s recoverable amount. A previously recognised impairment loss is reversed
only if there has been a change in the estimates used to determine the asset’s recoverable amount since
the last impairment loss was recognised. If that is the case, the carrying amount of the asset is increased
to its recoverable amount. That increased amount cannot exceed the carrying amount that would have
been determined, net of depreciation, had no impairment loss been recognised previously. Such reversal is
recognised in profit or loss.
2.11 Subsidiaries
A subsidiary is an investee that is controlled by the Group. The Group controls an investee when it is exposed,
or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns
through its power over the investee.
In the Company’s separate financial statements, investment in subsidiaries are accounted for at cost less
impairment losses.
2.12 Associate
An associate is an entity over which the Group has the power to participate in the financial and operating policy
decisions of the investee but does not have control or joint control of those policies.
The Group’s investment in associate is accounted for using the equity method. Under the equity method, the
investment in associate is carried in the statements of financial position at cost plus post-acquisition changes
in the Group’s share of net assets of the associate. Goodwill relating to associate is included in the carrying
amount of the investment and is neither amortised nor tested individually for impairment. Any excess of the
Group’s share of the net fair value of the associate’s identifiable asset, liabilities and contingent liabilities over
the cost of the investment is included as income in the determination of the Group’s share of results of the
associate in the period in which the investment is acquired.
The profit or loss reflects the share of the results of operations of the associate. Where there has been a
change recognised in other comprehensive income by the associate, the Group recognises its share of such
changes in other comprehensive income. Unrealised gains and losses resulting from transactions between the
Group and the associate are eliminated to the extent of the interest in the associate.
