Page 244 - BTSGroup ONE REPORT 2021/22_EN
P. 244
242 l Introduction l Nature of Business l Organisation and Shareholding Structure l Business Review l Corporate Governance l Financial Statements l Other Information l
Allowance for impairment of non-financial assets Estimated project costs
In determining allowance for impairment of a non-financial asset, The Group estimates costs of project costs based on details of the work,
the management is required to exercise judgements regarding determination taking into account the volume and value of materials to be used in
of the recoverable amount of the asset, which is the higher of its fair the project, labour costs and other miscellaneous costs to be incurred
value less costs of disposal and its value in use. The fair value less to completion of service. Estimates are reviewed regularly or whenever
costs of disposal calculation is based on available data from binding actual costs differ significantly from the figures used in the
sales transactions, conducted at arm’s length, for similar assets or original estimates.
observable market prices less incremental costs of disposing of the asset.
The value in use calculation is based on a discounted cash flow model. Allocation of assets, liabilities, revenues and expenses to BTSGIF
The cash flows do not include restructuring activities that the
Group is not yet committed to or significant future investments that will The subsidiary allocates assets, liabilities, revenues and expenses in
enhance the performance of the assets of the cash-generating unit being order to submit net fare box revenues to BTSGIF. In making these
tested (for fair value less cost of disposal based on income approach, allocations, the management needs to apply judgement, bases,
cash flow includes significant future investments that will enhance the information and various assumptions, regarding matters such as route
performance of the assets). The recoverable amount is sensitive to the length and the expenses reimbursable from BTSGIF. The allocations are
discount rate used for the discounted cash flow model as well as the reviewed whenever new transactions occur and circumstances change.
expected future cash-inflows and the growth rate used for In addition, the bases, information and various assumptions have to be
extrapolation purposes. verified and approved by BTSGIF.
Derecognition of financial instruments
Post-employment benefits under defined benefit plans and other
long-term employee benefits A financial liability is derecognised when the obligation under the liability
is discharged or cancelled or expires. When an existing financial liability
The obligation under the defined benefit plan and other long-term is replaced by another from the same lender on substantially different
employee benefit plan is determined based on actuarial techniques. terms, or the terms of an existing liability are substantially modified,
Such determination is made based on various assumptions, including such an exchange or modification is treated as the derecognition of the
discount rate, future salary increase rate, mortality rate and staff original liability and the recognition of a new liability. The difference in
turnover rate.
the respective carrying amounts is recognised in profit or loss.
Provisions
Litigations
The Group determines the provisions using various assumptions The Group has contingent liabilities as a result of litigations.
relevant to each provision. Estimates are reviewed whenever The management has used judgement to assess of the results of the
circumstances change.
litigations and believe that no loss will result. Therefore, no contingent
liabilities are recorded as at the end of reporting period.
