AUDITED FINANCIAL STATEMENTS
which it belongs. Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is wri en down to its recoverable amount. In assessing value in use, the es mated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the me value of money and the risks specific to the asset. An impairment loss is charged to opera ons in the period in which it arises, unless the asset is carried at a revalued amount, in which case the impairment loss is charged to the revalua on increment of the said asset. Impairment assessment is made at each repor ng date as to whether there is any indica on that previously recognized impairment losses may no longer exist or may have decreased. If such indica on exists, the recoverable amount is es mated. A previously recognized impairment loss is reversed only if there has been a change in the es mates used to determine the asset’s recoverable amount since the last impairment loss was recognized. If that is the case, the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that would have been determined, net of deprecia on, had no impairment loss been recognized for the asset in prior years. Such reversal is recognized in the statement of revenue and expenses unless the asset is carried at a revalued amount, in which case the reversal is treated as a revalua on increase. A er such a reversal, the deprecia on expense is adjusted in future years to allocate the asset’s revised carrying amount, less any residual value, on a systema c basis over its remaining life. Revenue Recogni on Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Organiza on and the revenue can be reliably measured. The following specific recogni on criteria must also be met before the revenue is recognized: Dona ons and contribu ons Dona ons and contribu ons received are recognized as income in the statement of revenue and expenses upon receipt. Interest income For all financial asset measured at amor zed cost, interest income is recorded at the EIR, which is the rate that exactly discounts es mated future cash payments or receipts through the expected life of the financial asset or a shorter period, where appropriate, to the net carrying amount of the financial asset. The calcula on takes into account all contractual terms of the financial asset, includes any fees (such as service fees) or incremental costs that are directly a ributable to the instrument and are an integral part of the EIR, but not future credit losses. The adjusted carrying amount is calculated based on the original EIR. The change in carrying amount is recorded as interest income. Once the recorded value of a financial asset or group of similar financial assets has been reduced due to an impairment loss, interest income con nues to be recognized using the original EIR applied to the new carrying amount. Leases The determina on of whether an arrangement is, or contains a lease is based on the substance of the arrangement and requires an assessment of whether the fulfillment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset. A reassessment is made a er incep on of the lease only if one of the following applies: Annual Report 2008
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