Straco Corporation Limited • Annual Report 2014
62
NOTES TO THE FINANCIAL STATEMENTS
6
Investments in subsidiaries (cont’d)
Assessment of impairment
The Company evaluates whether there is any objective evidence that its investments in subsidiaries are impaired and determines the amount of
impairment loss based on the estimated recoverable amounts of the subsidiaries. The financial health of, and near-term business outlook for, the
subsidiaries, including factors such as industry performance and cash flows from operations of these subsidiaries, are considered. Any significant
changes in the business environment and estimates of the recoverable amounts of the subsidiaries, if subject to impairment loss, can affect the
carrying values of the subsidiaries.
Based on current year assessment, no additional allowance for impairment to the investment in subsidiaries was considered necessary at the reporting
date.
7
Long-term loans to subsidiaries
Company
2014
2013
$
$
Long-term loan to a subsidiary
1,500,000
1,500,000
Less: Impairment allowance
(1,500,000)
(1,500,000)
–
–
The long-term loan to a subsidiary of $1,500,000 is unsecured, bears interest at 0.59728% (2013: 0.56333%) per annum and is not expected to be
repaid within the next 12 months.
