Powering growth - Aztech Group Ltd - Investor Relations

F i n a n c i a l S t a t e m e n t sa z t e c h a n n u a l r e p o r t 2 0 0 9532 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)For certain categories of financial assets, such as trade receivables, assets that are assessed not to be impaired individually are, in addition,assessed for impairment on a collective basis. Objective evidence of impairment for a portfolio of receivables could include the Group’s pastexperience of collecting payments, an increase in the number of delayed payments in the portfolio past the average credit period of 45 days, aswell as observable changes in national or local economic conditions that correlate with default on receivables.For financial assets carried at amortised cost, the amount of the impairment is the difference between the asset’s carrying amount and thepresent value of estimated future cash flows, discounted at the original effective interest rate.The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade and otherreceivables where the carrying amount is reduced through the use of an allowance account. When trade and other receivables are uncollectible,they are written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the profit orloss. Changes in the carrying amount of the allowance account are recognised in profit or loss.When an available-for-sale financial asset is considered to be impaired, cumulative gains or losses previously recognised in other comprehensiveincome are reclassified to profit or loss.With the exception of available-for-sale equity investments, if, in a subsequent period, the amount of the impairment loss decreases and thedecrease can be related objectively to an event occurring after the impairment loss was recognised, the previously recognised impairment loss isreversed through profit or loss to the extent the carrying amount of the investment at the date the impairment is reversed does not exceed whatthe amortised cost would have been had the impairment not been recognised.In respect of available-for-sale equity instruments, impairment losses previously recognised in profit or loss are not reversed through profit or loss.Any subsequent increase in fair value after an impairment loss is recognised in other comprehensive income.Derecognition of financial assetsThe Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or it transfers the financialasset and substantially all the risks and rewards of ownership of the asset to another entity. If the Group neither transfers nor retains substantiallyall the risks and rewards of ownership and continues to control the transferred asset, the Group recognises its retained interest in the asset andan associated liability for amounts it may have to pay. If the Group retains substantially all the risks and rewards of ownership of a transferredfinancial asset, the Group continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.Financial liabilities and equity instrumentsClassification as debt or equityFinancial liabilities and equity instruments issued by the Group are classified according to the substance of the contractual arrangements enteredinto and the definitions of a financial liability and an equity instrument.Equity instrumentsAn equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities. Equityinstruments are recorded at the proceeds received, net of direct issue costs.