NOTES TO FINANCIAL STATEMENTS
30 June 2015
Karin Technology Holdings Limited
Annual Report 2015
62
2.4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(continued)
FAIR VALUE MEASUREMENT
The Group measures its investment properties, leasehold land and buildings and forward currency contracts, at fair
value at the end of each reporting period. Fair value is the price that would be received to sell an asset or paid to
transfer a liability in an orderly transaction between market participants at the measurement date. The fair value
measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place
either in the principal market for the asset or liability, or in the absence of a principal market, in the most advantageous
market for the asset or liability. The principal or the most advantageous market must be accessible by the Group.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when
pricing the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate
economic benefits by using the asset in its highest and best use or by selling it to another market participant
that would use the asset in its highest and best use.
The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data
are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of
unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised
within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair
value measurement as a whole:
Level 1 – based on quoted prices (unadjusted) in active markets for identical assets or liabilities
Level 2 – based on valuation techniques for which the lowest level input that is significant to the fair value
measurement is observable, either directly or indirectly
Level 3 – based on valuation techniques for which the lowest level input that is significant to the fair value
measurement is unobservable
For assets and liabilities that are recognised in the financial statements on a recurring basis, the Group determines
whether transfers have occurred between levels in the hierarchy by reassessing categorisation (based on the lowest
level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
IMPAIRMENT OF NON-FINANCIAL ASSETS
Where an indication of impairment exists, or when annual impairment testing for an asset is required (other
than inventories, financial assets, deferred tax assets, investment properties and goodwill), the asset’s recoverable
amount is estimated. An asset’s recoverable amount is the higher of the asset’s or cash-generating unit’s value
in use and its fair value less costs of disposal, and is determined for an individual asset, unless the asset does
not generate cash inflows that are largely independent of those from other assets or groups of assets, in which
case the recoverable amount is determined for the cash-generating unit to which the asset belongs.
