Page 58 - Stellar IAR2015

NOTES TO THE ANNUAL FINANCIAL STATEMENTS (CONTINUED)1.4.6. Trade and other payablesTrade and other payables are initially measured at fair value plus transaction costs and are subsequently measured at amortised cost using the e ective interest method.1.4.7. Impairment of nancial assetsAt each reporting date the Company assesses all nancial assets, other than those designated as at FVTPL, in order to determine whether there is objective evidence that a nancial asset or group of nancial assets is impaired at the reporting date. Impairment losses are recognised in pro t or loss. The amount of the impairment is the di erence between the carrying amount and the recoverable amount of the nancial assets, being the present value of expected cash ows discounted at the original e ective interest rate.Impairment losses are reversed in subsequent periods when an increase in the nancial asset’s recoverable amount can be related objectively to an event occurring after the impairment was recognised, but only to the extent that the carrying amount of the nancial asset at the date that the impairment is reversed does not exceed what the nancial asset’s carrying amount would have been had the impairment not been previously recognised. Reversals of impairment losses are recognised in pro t or loss.1.5. Fair value estimationFinancial instruments at FVTPL are measured in accordance with IFRS 13 Fair Value Measurement (IFRS 13) at each reporting date.1.5.1.1. Listed investmentsListed investments are measured at each reporting date using quoted market prices using the market approach in terms of IFRS 13, except where those listed investments are either thinly traded or alternatively where management, in an orderly market transaction, assesses the transaction in listed investments to be materially impacted by the volume of the transaction, the comparability of the transaction to the asset being measured or the proximity of the transaction to the measurement date. In such instances, the investment is valued in accordance with the valuation techniques applicable for unlisted investments.1.5.1.2. Unlisted investmentsUnlisted investments are measured using the market approach at each reporting date by primarily applying a sustainable earnings model. The sustainable earnings of an entity is derived from the latest reported Earnings Before Interest, Taxation, Dividends and Amortisation (EBITDA) for the entity, adjusted for any abnormal or non-recurring income and expenditure. Where it is not considered appropriate to use the market approach, an income or cost approach is used. The following validation checks are performed where possible:i. Discounted cash ows (income approach);ii. Net asset value and price-to-book ratio (market approach); andiii. Recent transaction prices (market approach).1.6. Property, plant and equipmentThe cost of an item of property, plant and equipment is recognised as an asset when:• it is probable that future economic bene ts associated with the item will ow to the Group; and• the cost of the item can be measured reliably.Property, plant and equipment is initially measured at cost, which includes any initial acquisition or construction costs incurred. Costs incurred subsequent to initial acquisition in relation to the addition, replacement of a part of, or service of an item of property, plant or equipment are included in the cost of the item when the costs constitute a refurbishment of a major component. If a replacement cost is recognised in the carrying amount of an item of property, plant and equipment, the carrying amount of the replaced part is derecognised.Property, plant and equipment is carried at cost less accumulated depreciation and any accumulated impairment losses.Depreciation is charged to pro t or loss for each component of an asset on a straight-line basis over its expected useful life to estimated residual values. The residual value, the estimated useful life and depreciation method of each asset are reviewed at the end of each reporting period.54 | STELLAR CAPITAL PARTNERS