146
Annual Report
2013
Ratchaburi Electricity Generating Holding Public Company Limited and its subsidiaries
Notes to the financial statements
25
Amortisation methods, useful lives and residual values are reviewed at each financial year-end and
adjusted if appropriate.
(j) Development expenditure
Development expenditure is recognised as an expense as incurred. Costs incurred on development
projects are recognised as intangible assets when it is probable that the project will be a success
considering its commercial and technological feasibility, and only if the cost can be measured reliably.
Other development expenditures are recognised as an expense as incurred. Development expenditure
previously recognised as an expense is not recognised as an asset in a subsequent period. Development
expenditure that has been capitalised is amortised from commencement of the commercial operation
on a straight-line basis over the period of its expected benefit.
(k) Impairment
The carrying amounts of the Group’s/Company’s assets are reviewed at each reporting date to
determine whether there is any indication of impairment. If any such indication exists, the assets’
recoverable amounts are estimated. For goodwill and intangible assets that have indefinite useful lives
or are not yet available for use, the recoverable amount is estimated each year at the same time.
An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds
its recoverable amount. The impairment loss is recognised in profit or loss
When a decline in the fair value of an available-for-sale financial asset has been recognised directly in
equity and there is objective evidence that the value of the asset is impaired, the cumulative loss that
had been recognised directly in equity is recognised in profit or loss even though the financial asset
has not been derecognised. The amount of the cumulative loss that is recognised in profit or loss is the
difference between the acquisition cost and current fair value, less any impairment loss on that
financial asset previously recognised in profit or loss.
Calculation of recoverable amount
The recoverable amount of held-to-maturity securities and receivables carried at amortised cost is
calculated as the present value of the estimated future cash flows discounted at the original effective
interest rate. Receivables with a short duration are not discounted.
The recoverable amount of available-for-sale financial assets is calculated by reference to the fair value.
The recoverable amount of a non-financial asset is the greater of the asset’s value in use and fair value
less costs to sell. 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. For an asset that does not generate cash inflows largely
independent of those from other assets, the recoverable amount is determined for the cash-generating
unit to which the asset belongs.
Reversals of impairment
An impairment loss in respect of a financial asset is reversed if the subsequent increase in recoverable
amount can be related objectively to an event occurring after the impairment loss was recognised in
profit or loss. For financial assets carried at amortised cost and available-for-sale financial assets that
are debt securities, the reversal is recognised in profit or loss. For available-for-sale financial assets
that are equity securities, the reversal is recognised in other comprehensive income.
otes to the financial statements
Ratchaburi Electricity Generating Holding Public Company Limited and its subsidiaries
