SENWES ANNUAL FINANCIAL STATEMENTS 2022
2.16.2 Non-financial assets On each reporting date the group considers whether there are any indications of impairment of an asset . If such an indication exists , the group prepares an estimate of the recoverable amount of the asset . The recoverable amount of an asset or the cash generating unit , within which it and other assets operate , is the greater of the fair value less the cost of selling and the value in use of the asset . Where the carrying amount of an asset exceeds the recoverable amount , the impairment is determined and the carrying amount written off to the recoverable amount . Where the value in use is determined , the expected future cash flow is discounted at their present value by using a pre-tax discounting rate reflecting the current market assessments of the time value of money and specific risks associated with the asset . In determining fair value less costs to sell , recent market transactions are taken into account . If no such transactions can be identified , an appropriate valuation model is used . These calculations are corroborated by valuation multiples , quoted share prices for publicly traded companies or other available fair value indicators . Impairment losses of continuing operations are recognised in profit or loss .
If there is an indication that previously recognised impairment losses no longer exist or that they have decreased , an estimate is once again made of the recoverable amount of the asset in question excluding goodwill and if necessary , the impairment is written back to the statement of profit or loss . The write-back may not cause the carrying value to exceed the recoverable amount or the value it would have been if it was not previously impaired . After such a write-back , the depreciation expense in future periods is adjusted to apportion the adjusted carrying amount of the asset , less its residual value , systematically over the remaining useful life .
2.17 Deferred government grants Government grants are recognised where there is reasonable assurance that the grant will be received and all attached conditions will be complied with .
Government grants have been received for the purchase of certain items of plant and equipment . There are no unfulfilled conditions or contingencies attached to these grants . Deferred government grants are recognised according to the useful life of the assets to which it relates .
2.18 Provisions and contingent liabilities Provisions Provisions are liabilities of which the timing or amount is uncertain and can be distinguished from other creditors . Provisions are only recognised if :
• A currently constructive or legal obligation exists due to a past event ;
• An outflow of economic benefits is probable in order to meet the commitment ; and
• A reliable estimate of the amount can be made .
Provisions are measured at the best estimate of the expenditure required to settle the present obligation at the reporting date . Provisions are disclosed in note 19 .
Liabilities are current obligations arising from past events , which are expected to result in economic benefits flowing from the business , when met , and are accounted for directly after the occurrence of the event giving rise to the obligation . Liabilities form part of creditors in the statement of financial position .
Contingent liabilities Contingent liabilities are potential obligations arising from past events , the existence of which will only be confirmed upon the occurrence or non-occurrence of one or more uncertain future events beyond the control of the business .
Contingent liabilities may also arise from a current obligation arising from past events but are not recognised because :
• It is improbable that an outflow of economic resources will occur ; and / or
• The amount cannot be measured or estimated reliably .
Contingent liabilities are not recognised but are merely disclosed by way of a note in the financial statements ( see note 21 ).
2.19 Non-current assets held-for-sale and discontinued operations A discontinued operation is a component of an entity which has been sold or classified as held-for-sale and :
• Represents a separate important business component or geographical area of activities ;
• Forms part of a single co-ordinated plan to sell a separate important business segment or geographical area of activities ;
• Is a subsidiary acquired with the sole purpose of selling it .
An item is classified as held-for-sale if the carrying amount of such item will largely be recovered through a transaction of sale rather than through continued use . Non-current assets and disposal groups classified as held-for-sale are measured at the lower of their carrying value and fair value less cost to sell . In the statement of comprehensive income , the after tax profit or loss is reported separately from profit or loss from continuing operations . Property , plant and equipment , once classified as held-for-sale , are not depreciated .
2.20 Treasury shares Own equity instruments that are reacquired are recognised at cost and deducted from equity . No gain or loss is recognised in profit or loss on the purchase , sale , issue or cancellation of the group ’ s own equity instruments . Any difference between the carrying amount and the consideration , if reissued , is recognised in equity .
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