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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)
2.14
Impairment of financial assets (cont’d)
Financial assets carried at amortised cost (cont’d)
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.
2.17 Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past
event, it is probable that an outflow of resources embodying economic benefits will be required to settle the
obligation and the amount of the obligation can be estimated reliably.
Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate. If it is no
longer probable that an outflow of economic resources will be required to settle the obligation, the provision is
reversed. If the effect of the time value of money is material, provisions are discounted using a current pre-tax
rate that reflects, where appropriate, the risks specific to the liability. When discounting is used, the increase in
the provision due to the passage of time is recognised as a finance cost.
2.18
Insurance contracts
Insurance contracts are those contracts where the Group has accepted significant insurance risk from another
party (the customers in the contract) by agreeing to compensate the customers if a specified uncertain future
event (the insured event) adversely affects the customers.
