NOTES TO FINANCIAL STATEMENTS
December 31, 2015
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
Loans and receivables
Trade receivables, loans and other receivables that have fixed or determinable payments that are not quoted in an
active market are classified as “loans and receivables”. Loans and receivables are measured at amortised cost using
the effective interest method less impairment. Interest is recognised by applying the effective interest method, except
for short-term receivables when the effect of discounting is immaterial.
Impairment of financial assets
Financial assets, other than those at fair value through profit or loss, are assessed for indicators of impairment at the
end of each reporting period. Financial assets are impaired where there is objective evidence that, as a result of one
or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the
investment have been impacted.
Objective evidence of impairment could include:
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For certain categories of financial assets, such as trade receivables, assets that are assessed not to be impaired
individually are, in addition, assessed for impairment on a collective basis. Objective evidence of impairment for a
portfolio of receivables could include the Group’s past experience of collecting payments, an increase in the number
of delayed payments in the portfolio past the average credit period, as well as observable changes in national or local
economic conditions that correlate with default on receivables.
For financial assets carried at amortised cost, the amount of the impairment is the difference between the asset’s
carrying amount and the present value of estimated future cash flows, discounted at the original effective interest
rate.
The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with
the exception of trade and other receivables where the carrying amount is reduced through the use of an allowance
account. When a trade or other receivable is uncollectible, it is written off against the allowance account. Subsequent
recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying
amount of the allowance account are recognised in profit or loss.
For financial assets measured at amortised cost, 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 loss was recognised,
the previously recognised impairment loss is reversed through profit or loss to the extent that the carrying amount of
the financial asset at the date the impairment is reversed does not exceed what the amortised cost would have been
had the impairment not been recognised.
YANLORD LAND GROUP LIMITED
ANNUAL REPORT 2015
72
