NOTES TO THE FINANCIAL STATEMENTS
FOR THE FInAncIAL yEAR EnDED 30 JunE 2016
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
i)
Impairment of non-financial assets excluding goodwill (cont’d)
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying
amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount.
An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a
revalued amount, in which case the impairment loss is recognised in other comprehensive income up to
the amount of any previous revaluation.
Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit)
is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount
does not exceed the carrying amount that would have been determined had no impairment loss been
recognised for the asset (cash-generating unit) in prior years. A previously recognised impairment loss
for an asset is only reversed if there has been a change in the estimates used to determine the asset’s
recoverable amount since the last impairment loss was recognised. A reversal of an impairment loss
is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in
which case the reversal of the impairment loss is treated as a revaluation increase.
j)
Financial liabilities
Financial liabilities include trade and other payables (excluding provision for unutilised annual leave), bank
borrowings and finance lease liabilities. Financial liabilities are recognised on the statement of financial
position when, and only when, the Group becomes a party to the contractual provisions of the financial
instruments. Financial liabilities are initially recognised at fair value plus directly attributable transaction
costs and subsequently measured at amortised cost using the effective interest method.
A financial liability is derecognised when the obligation under the liability is extinguished. Gains and losses
are recognised in profit or loss when the liabilities are derecognised and through the amortisation process.
k)
Provisions
Provisions are recognised when the Group has a present legal or constructive obligation as a result
of past event, and it is probable that an outflow of economic resources will be required to settle that
obligation and that the amount can be estimated reliably. Provisions are measured at management’s best
estimate of the expenditure required to settle the obligation at the reporting date, and are discounted to
present value where the effect is material.
l)
Share capital
Proceeds from issuance of ordinary shares are recognised as share capital in equity. Incremental costs
directly attributable to the issuance of ordinary shares are deducted against share capital.
m)
Treasury shares
The Group’s own equity instruments, which are reacquired (treasury shares) are recognised at cost and
deducted from equity. No gain or loss is recognised in profit or loss on the purchase, sales, issue or
cancellation of the Group’s own equity instruments. Any difference between carrying amount of treasury
shares and the consideration received, if reissued, is recognised directly in other reserves. Voting rights
related to treasury shares are nullified for the Group and no dividend is allocated to them respectively.
74
ISOTEAM LTD.
ANNUAL REPORT 2016
