78
Cordlife Group Limited
Annual Report 2016
Notes to
The Financial Statements
for the financial year ended 30 June 2016
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 there is objective evidence that an impairment loss on the receivables has been
incurred, appropriate allowances for impairment loss or write-off of trade receivables will be made. Details of
the impairment loss allowance are outlined in Note 18.
Fair value measurement 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 2016.
The key assumptions used to determine the fair value of the investment properties are further explained in Note
13.
Fair value measurement of derivative asset
The Group carries its derivative asset at fair value, with changes in fair values being recognised in profit or loss.
The Group uses the Black-Scholes option pricing model to determine the fair value of the asset as at 30 June
2015.
The key assumptions used to determine the fair value of the derivative asset are further explained in Note 17.
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.
The carrying amount of the Group’s non-financial assets are disclosed in Notes 12, 13 and 14 to the financial
statements.
Income taxes
Significant judgement is involved in determining the Group-wide provision for income taxes. There are certain
transactions and computations for which the ultimate tax determination is uncertain during the ordinary course
of business. The Group recognises liabilities for expected tax issues based on estimates of whether additional
taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially
recognised, such differences will impact the income tax and deferred tax provisions in the period in which such
determination is made.
The carrying amount of the Group’s tax payable and deferred tax liabilities at 30 June 2016 was $592,000
(2015: $1,103,000) and $4,073,000 (2015: $91,000) respectively.
