Page 47 - Nanyang Technological University

ON A RAPID RISE

NOTES TO
FINANCIAL STATEMENTS (CONT’D)

31 March 2015

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)

2.6 Property, plant and equipment (cont’d)

At the beginning of the reporting period, the Group has reviewed the estimated useful life for buildings and
infrastructure. The estimated useful life for buildings and infrastructure has changed from 3 to 20 years
to 3 to 30 years. The financial impact of this reassessment for the financial period from April 1, 2014 to
March 31, 2015 is as follows:

$’000

Increase in surplus 262
Decrease in depreciation expenses 32,646
Decrease in deferred capital grants amortised 32,384
Increase in property, plant and equipment 32,646
Increase in deferred capital grants 32,384

The financial impact of this reassessment for future periods subsequent to March 31, 2015 is not disclosed
as management deems it impracticable to estimate the effects.

2.7 Impairment — non-financial assets

The carrying amounts of the Group’s non-financial assets are reviewed at each reporting date to determine
whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amounts
are estimated. Where it is not possible to estimate the recoverable amount of an individual asset, the
Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. Where
a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to
individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating
units for which a reasonable and consistent allocation basis can be identified.

An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds
its recoverable amount. A cash-generating unit is the smallest identifiable asset group that generates
cash flows that largely are independent from other assets and groups. Impairment losses are recognised
in the statement of comprehensive income unless it reverses a previous revaluation, credited to equity, in
which case it is charged to equity. Impairment losses recognised in respect of cash-generating units are
allocated first to reduce the carrying amount of any goodwill allocated to the units and then to reduce the
carrying amount of the other assets in the unit (group of units) on a pro rata basis.

The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair
value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their
present value using a pre-tax discount rate that reflects current market assessments of the time value
of money and the risks specific to the asset or cash-generating unit. For the purpose of impairment
testing, assets that cannot be tested individually are grouped together into the smallest group of assets
that generates cash inflows from continuing use that are largely independent of the cash inflows of other
assets or cash generating unit.

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