2.16 IMPAIRMENT OF ASSETS
All categories of assets are assessed for impairment at each reporting date.
2.16.1 Financial assets
The group recognises an allowance for expected credit losses (ECLs) for all debt instruments not held at fair value
through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with
the contract and all the cash flows that the group expects to receive, discounted at an approximation of the original
effective interest rate. The expected cash flows will include cash flows from the sale of collateral held or other credit
enhancements that are integral to the contractual terms.
Refer to note 11.5 for the detailed framework regarding impairment of financial assets.
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 writeback,
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 relevant
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 therefore be distinguished from other creditors.
Provisions are only recognised if:
l A currently constructive or legal obligation exists due to a past event;
l An outflow of economic benefits is probable in order to meet the commitment; and
l 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.
Senwesbel Limited Reg no: 1996/017629/06 SENWESBEL ANNUAL FINANCIAL STATEMENTS 2020 100