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LIPPO MALLS INDONESIA RETAIL TRUST ANNUAL REPORT 2014
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
Subsidiaries
A subsidiary is an entity including unincorporated and special purpose entity that is controlled by the reporting entity
and the reporting entity is exposed, or has rights, to variable returns from its involvement with the investee and has
the ability to affect those returns through its power over the investee. The existence and effect of substantive potential
voting rights that the reporting entity has the practical ability to exercise (that is, substantive rights) are considered
when assessing whether the reporting entity controls another entity.
In the Trust’s separate financial statements, the investments in subsidiaries are stated at cost less any allowance for
impairment in value. Impairment loss recognised in profit or loss for a subsidiary is reversed only if there has been
a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was
recognised. The net book values of the subsidiaries are not necessarily indicative of the amounts that would be realised
in a current market exchange.
Business combinations
Business combinations are accounted for by applying the acquisition method. There were none during the reporting year.
Impairment of non-financial assets
Irrespective of whether there is any indication of impairment, an annual impairment test is performed at the same
time every year on an intangible asset with an indefinite useful life or an intangible asset not yet available for use.
The carrying amount of other non-financial assets is reviewed at each end of the reporting year for indications of
impairment and where an asset is impaired, it is written down through the profit or loss to its estimated recoverable
amount. The impairment loss is the excess of the carrying amount over the recoverable amount and is recognised in
the profit or loss unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated
as a revaluation decrease. The recoverable amount of an asset or a cash-generating unit is the higher of its fair value
less costs to sell and its value in use. 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 the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately
identifiable cash flows (cash-generating units). At each end of the reporting year non-financial assets other than
goodwill with impairment loss recognised in prior periods are assessed for possible reversal of the impairment.
An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount
that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.
Notes to the Financial Statements
(Cont’d)
31 December 2014
