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AirAsia X Berhad • Annual Report 2014
NOTES TO THE FINANCIAL STATEMENTS
AS AT 31 DECEMBER 2014
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(e)
Property, plant and equipment (continued)
At each balance sheet date, the Group and Company assess whether there is any indication of impairment. If such an indication exists, an analysis is performed to
assess whether the carrying amount of the asset is fully recoverable. A write down is made if the carrying amount exceeds the recoverable amount. See accounting
policy Note 2(g) on impairment of non-financial assets.
Gains and losses on disposals are determined by comparing proceeds with carrying amounts and are included in the income statements.
(f)
Investments in subsidiaries, joint ventures and associates
In the Company’s separate financial statements, investments in subsidiaries, joint ventures and associates are stated at cost less accumulated impairment losses.
Where an indication of impairment exists, the carrying amount of the investment is assessed and written down immediately to its recoverable amount (see Note 2(g)).
On disposal of investments in subsidiaries, joint ventures and associates, the difference between disposal proceeds and the carrying amounts of the investments are
recognised in profit or loss.
(g)
Impairment of non-financial assets
Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be
recoverable. An impairment loss is recognised for the amount by which the carrying amount of the asset exceeds its recoverable amount. The recoverable amount is
the higher of an asset’s fair value less cost to sell and value-in-use. For the purpose of assessing impairment, assets are grouped at the lowest level for which there
are separately identifiable cash flows (CGUs). Non-financial assets other than goodwill that suffered an impairment are reviewed for possible reversal at each reporting
date.
Any impairment loss is charged to profit or loss unless it reverses a previous revaluation in which case it is charged to the revaluation surplus. Impairment losses on
goodwill are not reversed. In respect of other assets, any subsequent increase in recoverable amount is recognised in profit or loss unless it reverses an impairment
loss on a revalued asset in which case it is taken to revaluation surplus.
(h)
Maintenance and overhaul
Owned aircraft
The accounting for the cost of major airframe and certain engine maintenance checks for own aircraft is described in the accounting policy for property, plant and
equipment (see Note 2(e)).
Leased aircraft
Where the Group and Company have a commitment to maintain aircraft held under operating leases, a provision is made during the lease term for the rectification
obligations contained within the lease agreements. The provisions are based on estimated future costs of major airframe, certain engine maintenance checks and one-
off costs incurred at the end of the lease by making appropriate charges to the income statements calculated by reference to the number of hours or cycles operated
during the financial year.
