Page 89 - SAR141018_Forterra AR 2013

FORTERRA
ANNUAL REPORT 2013
NOTES TO THE
FINANCIAL STATEMENTS
87
3 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(e) Financial instruments (Continued)
(v) Intra-group financial guarantees
Financial guarantee contracts are accounted for as insurance contracts and treated
as contingent liabilities until such time as they become probable that the Group will
be required to make a payment under the guarantee. A provision is recognised based
on the Group’s estimate of the ultimate cost of settling all claims incurred but unpaid
at the balance sheet date. The provision is assessed by reviewing individual claims
and tested for adequacy by comparing the amount recognised and the amount that
would be required to settle the guarantee contract.
(f) Unitholders’ funds
Unitholders’ funds represent the Unitholders’ share of all net cash proceeds derived
from the realisation of the assets of the Trust less any liabilities upon termination and
are classified as equity. Incremental costs directly attributable to the issue of units are
recognised as a deduction from equity, net of any tax effects.
When units are repurchased and cancelled, the amount of the consideration paid, which
includes directly attributable costs, net of any tax effects, is recognised as a deduction
from unitholders’ funds.
(g) Impairment
(i) Non-derivative financial assets
A financial asset not carried at fair value through profit or loss is assessed at the
end of each reporting period to determine whether there is objective evidence that
it is impaired. A financial asset is impaired if objective evidence indicates that a loss
event has occurred after the initial recognition of the asset, and that the loss event
has a negative effect on the estimated future cash flows of that asset that can be
estimated reliably.
Loans and receivables
The Group considers evidence of impairment for loans and receivables at both a
specific asset and collective level. All individually significant loans and receivables
are assessed for specific impairment. All individually significant receivables found not
to be specifically impaired are then collectively assessed for any impairment that has
been incurred but not yet identified. Loans and receivables that are not individually
significant are collectively assessed for impairment by grouping together loans and
receivables with similar risk characteristics.