Asia-Pacific Strategic Investments Limited - Annual Report 2021

Notes to the Financial Statements For the financial year ended 30 June 2021

2

Summary of significant accounting policies (continued)

2.24 Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issuance of new ordinary shares are deducted against the share capital account.

2.25 Dividends to Company’s shareholders

Dividends to the Company’s shareholders are recognised when the dividends are approved for payment.

3

Critical accounting estimates, assumptions and judgements

Estimates, assumptions and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

3.1 Estimated impairment of non-financial assets

Property, plant and equipment and investments in subsidiary corporations are tested for impairment whenever there is any objective evidence or indication that these assets may be impaired. The recoverable amounts of these assets have been determined based on the higher of fair value less costs to sell or value-in-use calculations. If the carrying amounts exceed the recoverable amounts, an impairment loss is recognised to profit or loss for the differences.

Impairment of property, plant and equipment

The carrying amount of the Group’s and the Company’s property, plant equipment at the balance sheet date are S$30,027,000 and S$100,000 (2020: S$29,780,000 and S$311,000) respectively. The assets used in the hotel operations, which are included in property, plant and equipment, amounted to S$29,843,000 (2020: S$29,327,000). Management has assessed the recoverable amounts of the assets used in hotel operations based on the fair value less costs to sell which is determined using income approach (2020: value-in-use). The key assumptions used include growth rate of 3% (2020: 4%), inflation rate of 2% (2020: 3%) and pre-tax discount rate of 7% (2020: 7%). No impairment is recognised during the financial years ended 30 June 2021 and 2020, as the recoverable amount is S$30,674,000 (2020: S$30,012,000) or 2.8% (2020: 2%) higher than the carrying amount.

Impairment of investments in subsidiary corporations

The carrying amount of investments in subsidiary corporations at the balance sheet date is S$25,575,000 (2020: S$23,495,000). As at 30 June 2021, no additional impairment was provided as the recoverable amount which was determined by management based on value-in-use was not lower than its carrying amount.

ANNUAL REPORT 2021

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