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Notes to the Consolidated Financial Statements

31st March 2015

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

2.9 Impairment of non-financial assets

Assets that have an indefinite useful life are not subject to amortisation and are tested annually
for impairment. Assets that are subject to amortisation are reviewed for impairment whenever
events or changes in circumstances indicate that the carrying amount may not be recoverable.
An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds
its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to
sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest
levels for which there are separately identifiable cash flows (cash-generating units). Non-financial
assets other than goodwill that suffered an impairment are reviewed for possible reversal of the
impairment at each reporting date.

2.10 Discontinued operation

A discontinued operation is a component of the Group’s business, the operations and cash flows
of which can be clearly distinguished from the rest of the Group and which represents a separate
major line of business or geographic area of operations, or is part of a single co-ordinated plan to
dispose of a separate major line of business or geographical area of operations, or is a subsidiary
acquired exclusively with a view to resale.

When an operation is classified as discontinued, a single amount is presented in the consolidated
income statement, which comprises the post-tax profit or loss of the discontinued operation and
the post-tax gain or loss recognised on the measurement to fair value less costs to sell, or on the
disposal, of the assets or disposal group(s) constituting the discontinued operation.

2.11 Financial assets

2.11.1 Classification

The Group classifies its financial assets as loans and receivables. The classification depends
on the purpose for which the financial assets were acquired. Management determines the
classification of its financial assets at initial recognition.

Loans and receivables are non-derivative financial assets with fixed or determinable payments
that are not quoted in an active market. They are included in current assets, except for
those with maturities greater than 12 months after the end of the reporting period. These
are classified as non-current assets. The Group’s loans and receivables comprise “loans
and receivables”, “trade and other receivables” and “cash and cash equivalents” in the
consolidated balance sheet (Notes 2.14 and 2.15).

ALCO HOLDINGS LIMITED ANNUAL REPORT 2015 45