Impairment of non-derivative financial assets
Financial assets are assessed at each reporting date to determine whether there is objective evidence of impairment.
Objective evidence that financial assets are impaired includes:
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• | default or delinquency by a debtor; |
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• | indications that a debtor or issuer will enter bankruptcy; |
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• | adverse changes in the payment status of borrowers or issuers; |
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• | the disappearance of an active market for a security; or |
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• | observable data indicating that there is measurable decrease in expected cash flows from a group of financial assets. |
Financial assets measured at amortized cost
The Group considers evidence of impairment for these assets at an individual asset level. An impairment loss is calculated as the difference between an asset’s carrying amount and the present value of the estimated future cash flows discounted at the asset’s original effective interest rate. Losses are recognized in profit or loss and reflected in an allowance account. When the Group considers that there are no realistic prospects of recovery of the asset, the relevant amounts are written off. If the amount of impairment loss subsequently decreases and the decrease can be related objectively to an event occurring after the impairment was recognized, then the previously recognized impairment loss is reversed through profit or loss.
