Annual Report - QuamIR

Notes to the Consolidated Financial Statements (Continued)
2 Summary of significant accounting policies (Continued)
2.12 Impairment of investments in subsidiaries,
associated companies, jointly controlled
entities and non-financial assets
Assets that have an indefinite useful life or intangible assets
not ready to use are not subject to amortisation and are tested
annually for impairment. Assets which are subject to amortisation
are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount may not be
recoverable. An impairment loss is recognised for the amount
by which the asset’s carrying amount exceeds its recoverable
amount. The recoverable amount is the higher of an asset’s fair
value less costs to sell and value in use. For the purposes of
assessing impairment, assets are grouped at the lowest levels for
which there are separately identifiable cash flows (cash-generating
units). Non-financial assets other than goodwill that suffered an
impairment are reviewed for possible reversal of the impairment
at each reporting date.
2.13 Non-current assets (or disposal groups) held
for sale
Non-current assets (or disposal groups) are classified as assets
held for sale when their carrying amount is to be recovered
principally through a sale transaction and a sale is considered
highly probable. They are stated at the lower of carrying amount
and fair value less costs to sell.
2.14 Construction contracts
Contract costs are recognised as an expense by reference to
the stage of completion of the contract activity at the end of the
reporting period. When the outcome of a construction contract
cannot be estimated reliably, contract revenue is recognised
only to the extent of contract costs incurred that are likely to be
recoverable. When the outcome of a construction contract can
be estimated reliably and it is probable that the contract will be
profitable, contract revenue is recognised over the period of
the contract by reference to the stage of completion. When it
is probable that total contract costs will exceed total contract
revenue, the expected loss is recognised as an expense
immediately.
2
2.12
2.13
2.14
Variations in contract work, claims and incentive payments are
included in contract revenue to the extent that may have been
agreed with the customer and are capable of being reliably
measured.
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