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Financial assets measured at amortised cost
The Group considers evidence of impairment for these assets at both an individual asset and a collective level. All individually
significant assets are individually assessed for impairment. Those foundnot to be impaired are then collectively assessed for any
impairment that has been incurredbut not yet individually identified. Assets that arenot individually significant are collectively
assessed for impairment. Collective assessment is carried out by grouping together assetswith similar risk characteristics.
In assessing collective impairment, the Group uses historical information on the timing of recoveries and the amount of loss
incurred, and makes an adjustment if current economic and credit conditions are such that the actual losses are likely to be
greater or lesser than suggested by historical trends.
An impairment loss is calculated as the difference between an asset’s carrying amount and the present value of the estimated
future cash f lows discounted at the asset’s original effective interest rate. Losses are recognised in profit or loss and ref lected
in an allowance account.
When the Group considers that there are no realistic prospects of recovery of the asset, the relevant amounts are written off.
If the amount of impairment loss subsequently decreases and the decrease can be related objectively to an event occurring
after the impairment was recognised, then the previously recognised impairment loss is reversed through profit or loss.
Available-for-sale financial assets
Impairment losses onavailable-for-sale financial assets are recognised by reclassifying the losseswhichhave been recognized
previously in OCI and the accumulated in the fair value reserve to profit or loss. The amount reclassified is the difference be-
tween the acquisition cost (net of any principal repayment and amortisation) and the current fair value, less any impairment
loss previously recognised in profit or loss.
If the fair value of an impaired available-for-sale debt security subsequently increases and the increase can be related objec-
tively to an event occurring after the impairment loss was recognised, then the impairment loss is reversed through profit or
Impairment loss.
losses recognised in profit or loss for an investment in an equity instrument classified as available-for-sale are not reversed
through profit or loss.
Equity-accounted investees
An impairment loss in respect of anequity-accounted investee ismeasuredby comparing the recoverable amount of the invest-
ment with its carrying amount. An impairment loss is recognised inprofit or loss, and is reversed if there has been a favourable
change in the estimates used to determine the recoverable amount
.
2 Non-financial Assets
At each reporting date, the Group reviews the carrying amounts of its non
‑
financial assets (other than biological assets, invest-
ment property, inventories and deferred tax assets) to determine whether there is any indication of impairment. If any such
indication exists, then the asset’s recoverable amount is estimated. Goodwill is tested annually for impairment.
For impairment testing, assets are grouped together into the smallest group of assets that generates cash inf lows fromcontinu-
ing use that are largely independent of the cash inf lows of other assets or CGUs. Goodwill arising froma business combination
is allocated to CGUs or groups of CGUs that are expected to benefit from the synergies of the combination.
The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. Value in use is
based on the estimated future cash f lows, discounted to their present value using a pre
‑
tax discount rate that ref lects current
market assessments of the time value of money and the risks specific to the asset or CGU.
An impairment loss is recognised if the carrying amount of an asset or CGU exceeds its recoverable amount.
2016 ANNUAL REPORT
104
GB Auto (S.A.E.)
Notes to the consolidated financial statements for the financial year ended December 31, 2016
(In thenotes all amounts are shown inThousandEgyptianPounds unless otherwise stated)