identifiable cash inflows which are largely
independent of the cash inflows from other
assets or groups of assets (cash‑generating
units). Non‑financial assets that suffered
impairment are reviewed for possible reversal of
the impairment at each reporting date.
(k) Cash and cash equivalents
Cash and cash equivalents includes cash on hand,
deposits held at call with financial institutions,
other short‑term, highly liquid investments with
original maturities of three months or less that
are readily convertible to known amounts of cash
and which are subject to an insignificant risk of
changes in value.
(l) Trade and other receivables
All trade receivables are recorded at the amount
due based on a pricing regime agreed with train
operators, generally have 7‑30 day terms and are
recognised and carried at original invoice amount
less an allowance for any uncollectible amounts.
An allowance for doubtful debts is made when
there is objective evidence (such as, potential
default or delinquency by a debtor) that the Group
will not be able to collect the debts. Bad debts are
written off when identified.
(m) Inventories
Inventories are valued at lower of cost and net
realisable value. Cost is assigned on a first‑in
first‑out basis.
(n) Derivatives and hedging activities
Derivatives are initially recognised at fair value on
the date a derivative contract is entered into and
are subsequently remeasured to their fair value at
the end of each reporting period. The accounting
for subsequent changes in fair value depends on
whether the derivative is designated as a hedging
instrument, and if so, the nature of the item being
hedged. The Group designates certain derivatives
as either:
••
hedges of the fair value of recognised assets
or liabilities or a firm commitment (fair
value hedges)
••
hedges of the cash flows of recognised assets
and liabilities and highly probable forecast
transactions (cash flow hedges)
The Group documents at the inception of the
hedging transaction the relationship between
hedging instruments and hedged items, as well
as its risk management objective and strategy
for undertaking various hedge transactions. The
Group also documents its assessment, both at
hedge inception and on an ongoing basis, of
whether the derivatives that are used in hedging
transactions have been and will continue to be
highly effective in offsetting changes in fair values
or cash flows of hedged items.
The fair values of various derivative financial
instruments used for hedging purposes are
disclosed in note 13. Movements in the hedging
reserve in shareholders’ equity are shown in note
31.The full fair value of a hedging derivative is
classified as a non‑current asset or liability when
the remaining maturity of the hedged item is
more than 12 months; it is classified as a current
asset or liability when the remaining maturity of
the hedged item is less than 12 months.
(i) Cash flow hedge
The effective portion of changes in the fair value
of derivatives that are designated and qualify as
cash flow hedges is recognised in equity in the
hedging reserve. The gain or loss relating to the
ineffective portion is recognised immediately in
the Consolidated Income Statement within other
income or other expense.
Amounts accumulated in equity are transferred
to the Consolidated Income Statement in the
periods when the hedged item affects profit or
loss (for instance when the delivery of the goods
hedged takes place). The gain or loss relating to
Note 01
Summary of significant accounting policies (continued)
64
