KU2021
3 . Summary of Accounting Policies ( continued )
The amortised cost of a financial asset is the amount at which the financial asset is measured at initial recognition minus the principal repayments , plus the cumulative amortisation using the effective interest method of any difference between that initial amount and the maturity amount , adjusted for any loss allowance . The gross carrying amount of a financial asset is the amortised cost of a financial asset before adjusting for any loss allowance .
Trade and other receivables Trade and other receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective interest method , less any allowance for expected credit losses . Trade receivables are generally due for settlement within 30 days .
De-recognition of Financial Assets The Company derecognises a financial asset when the contractual rights to the cash flows from the asset expire , or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party .
Impairment of trade and other receivables The Company has applied the simplified approach to measuring expected credit losses , which uses a lifetime expected loss allowance . To measure the expected credit losses , trade receivables have been grouped based on days overdue . The amount of expected credit losses is updated at each reporting date to reflect changes in credit risk since initial recognition of the respective financial instrument .
The amortised cost of a financial asset is the amount at which the financial asset is measured at initial recognition minus the principal repayments , plus the cumulative amortisation using the effective interest method of any difference between that initial amount and the maturity amount , adjusted for any loss allowance . The gross carrying amount of a financial asset is the amortised cost of a financial asset before adjusting for any loss allowance .
e ) Impairment The carrying values of property , plant and equipment are reviewed for impairment at each reporting date , with the recoverable amount being estimated when events or changes in circumstances indicate that the carrying value may be impaired .
The recoverable amount of property , plant and equipment is the higher of fair value less costs to sell and value in use . Depreciated replacement cost is used to determine value in use . Depreciated replacement cost is the current replacement cost of an item of plant and equipment less , where applicable , accumulated depreciation to date , calculated on the basis of such cost .
f ) Leases The Company assesses whether a contract is or contains a lease , at inception of the contract . The Company recognises a right-of-use asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee , except for short-term leases ( defined as leases with a lease term of 12 months or less ) and leases of low value assets ( such as tablets and personal computers , small items of office furniture and telephones ). For these leases , the Company recognises the lease payments as an operating expense on a straight-line basis over the term of the lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased assets are consumed .
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date , discounted by using the rate implicit in the lease . If this rate cannot be readily determined , the Company uses its incremental borrowing rate .
Lease payments included in the measurement of the lease liability comprise :
• Fixed lease payments ( including in-substance fixed payments ), less any lease incentives receivable .
• Variable lease payments that depend on an index or rate , initially measured using the index or rate at the commencement date .
The lease liability is presented as a separate line in the Consolidated Statement of Financial Position .
The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability ( using the effective interest method ) and by reducing the carrying amount to reflect the lease payments made .
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