Page 74 - Annual Report

HONG KONG ACADEMY OF MEDICINE
香港醫學專科學院
學
院
學
專
香
科
港
醫
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

g) Credit losses and impairment of assets (Continued)

(i) Credit losses from financial instruments (Continued)

Write-off policy

The gross carrying amount of a financial asset is written off (either partially or in
full) to the extent that there is no realistic prospect of recovery. This is generally
the case when the Group determines that the debtor does not have assets or
sources of income that could generate sufficient cash flows to repay the amounts
subject to the write-off.

Subsequent recoveries of an asset that was previously written off are recognised
as a reversal of impairment in profit or loss in the period in which the recovery
occurs.

(ii) Impairment of other non-current assets

Internal and external sources of information are reviewed at the end of each
reporting period to identify indications that plant and equipment including
right-of-use assets may be impaired or, an impairment loss previously recognised
no longer exists or may have decreased.

If any such indication exists, the asset’s recoverable amount is estimated:

– Calculation of recoverable amount

The recoverable amount of an asset is the greater of its fair value less costs
of disposal and value in use. 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. Where an asset does not generate cash
inflows largely independent of those from other assets, the recoverable
amount is determined for the smallest group of assets that generates cash
inflows independently (i.e. a cash-generating unit).

– Recognition of impairment losses

An impairment loss is recognised in profit or loss if the carrying amount of
an asset, or the cash-generating unit to which it belongs, exceeds its
recoverable amount. Impairment losses recognised in respect of
cash-generating units are allocated to reduce the carrying amount of the
assets in the unit (or group of units) on a pro rata basis, except that the
carrying value of an asset will not be reduced below its individual fair value
less costs of disposal (if measurable) or value in use (if determinable).

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72 HKAM Annual Report 2022