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EC World Real Estate Investment Trust ANNUAL REPORT 2016
NOTES TO THE
Financial Statements
For the Financial Year ended 31 December 2016
2.
Significant accounting policies (continued)
2.9 Financial assets (continued)
(e) Impairment (continued)
(i)
Loans and receivables (continued)
The impairment allowance is reduced through the Statement of Total Return in a subsequent period
when the amount of impairment loss decreases and the related decrease can be objectively measured.
The carrying amount of the asset previously impaired is increased to the extent that the new carrying
amount does not exceed the amortised cost had no impairment been recognised in prior periods.
2.10 Cash and cash equivalents
For the purpose of presentation in the consolidated statement of cash flows, cash and cash equivalents include
cash on hand and deposits with financial institutions which are subject to an insignificant risk of change in value.
2.11 Borrowings
Borrowings are presented as current liabilities unless the Group has an unconditional right to defer settlement for
at least 12 months after the reporting date, in which case they are presented as non-current liabilities.
Borrowings are initially recognised at fair value (net of transaction costs) and subsequently carried at amortised
cost. Any difference between the proceeds (net of transaction costs) and the redemption value is recognised in
the Statement of Total Return over the period of the borrowings using the effective interest method.
2.12 Trade and other payables
Trade and other payables represent liabilities for goods and services provided to the Group prior to the end of
financial year which are unpaid. They are classified as current liabilities if payment is due within one year or less (or
in the normal operating cycle of the business if longer). Otherwise, they are presented as non-current liabilities.
Trade and other payables are initially recognised at fair value, and subsequently carried at amortised cost using
the effective interest method.
2.13 Fair value estimation of financial assets and liabilities
The fair values of financial instruments traded in active markets (such as exchange-traded and over-the-counter
securities and derivatives) are based on quoted market prices at the reporting date. The quoted market prices used
for financial assets are the current bid prices; the appropriate quoted market prices used for financial liabilities are
the current asking prices.
The fair values of financial instruments that are not traded in an active market are determined by using valuation
techniques. The Group uses a variety of methods and makes assumptions based on market conditions that are
existing at each reporting date. Where appropriate, quoted market prices or dealer quotes for similar instruments
are used. Valuation techniques, such as discounted cash flow analysis, are also used to determine the fair values
of the financial instruments.