Annual Report 2020

124 Notes to the Financial Statements Annual Report 2020 Miramar Hotel and Investment Company, Limited 1 Significant accounting policies (Continued) (k) Credit losses and impairment of assets (continued) (i) Credit losses from financial instruments and lease receivables (continued) Significant increases in credit risk (continued) Evidence that a financial asset is credit-impaired includes the following observable events: – significant financial difficulties of the debtor; – a breach of contract, such as a default or past due event; – it becoming probable that the borrower will enter into bankruptcy or other financial reorganisation; – significant changes in the technological, market, economic or legal environment that have an adverse effect on the debtor; or – the disappearance of an active market for a security because of financial difficulties of the issuer. Write-off policy The gross carrying amount of a financial asset or lease receivable is written off (either partially or in full) to the extent that there is no realistic prospect of recovery. This is generally the case when the Group determines that the debtor does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject to the write-off. Subsequent recoveries of an asset that was previously written off are recognised as a reversal of impairment in profit or loss in the period in which the recovery occurs. (ii) Impairment of other non-current assets Internal and external sources of information are reviewed at the end of each reporting period to identify indications that the following assets may be impaired or, except in the case of goodwill, an impairment loss previously recognised no longer exists or may have decreased: – property, plant and equipment, including right-of-use assets (other than property carried at revalued amounts); – goodwill; and – investments in subsidiaries and associates in the Company’s statement of financial position. If any such indication exists, the asset’s recoverable amount is estimated. In addition, for goodwill, the recoverable amount is estimated annually whether or not there is any indication of impairment.