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174 KUMPULAN WANG PERSARAAN (DIPERBADANKAN) FoR BEttER REtURNS

notes to the
financial statements
for the year ended 31 december 2022

3. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS (CONTINUED)
(b) Impairment of non-financial assets

impairment of non-financial assets is executed when the carrying value of the asset or cgu exceeds the recoverable
amount of the asset or cgu, which is the higher of fair value less costs to sell and value in use. the calculation of
the fair value less costs to sell is based on the available data from binding sales transactions, conducted at arm’s
length for similar assets or the observable market prices less the incremental costs for the disposal of assets. the
calculation of the value in use is based on the discounted cash flow model whereby the cash flows are derived
from the next five (5) year budget excluding the restructuring activities yet to be committed by the group or KWap,
or significant future investments that will enhance the asset performance of the tested cgu. the recoverable
amount is most sensitive to the discount rate employed for the discounted cash flow model and the expected
future cash inflows as well as the growth rate used for extrapolation purposes.

(c) Impairment of financial assets
the group and KWap review the fixed income instruments designated as investment at fVoci or amortised cost
which are subject to impairment under the mfrs 9 at each reporting date to reflect changes in the credit risk
of the financial investments not at fVtpl. the mfrs 9 incorporates forward looking and historical, current and
forecasted information into the ecl estimation.
in the execution of impairment review, the following judgements by management are required:

(i) determination whether the investment is impaired based on certain indicators such as, amongst others,
difficulties of the issuers or obligors, deterioration of the credit quality of the issuers or obligors; and

(ii) determination of the ecl that reflects:
• An unbiased and probability-weighted amount that is determined by evaluating a range of possible
outcomes;
• The time value of money; and
• Reasonable and supportable information that is available without undue cost or effort at the reporting date
about current conditions and forecasts of future economic condition.

(d) Fair value of financial instruments

fair value is the price that would be received upon the sale of assets or paid upon the transfer of liabilities in an
orderly transaction between market participants at the measurement date. the fair value measurement is based
on the presumption that the transactions for the sale of assets or transfer of liabilities occur either in the principal
market for the assets or liabilities, or in the absence of the principal market, in the most advantageous market for
the assets or liabilities.
the fair value of assets or liabilities is measured using the assumptions that the market participants would use
when pricing the assets or liabilities, assuming that the market participants behave in their economic best interest.
in the absence of an active market, the fair value of financial instruments is determined using the valuation
techniques that are deemed appropriate in circumstances whereby sufficient data are available for the fair value
measurement with the maximisation of the use of relevant observable inputs and the minimisation of the use of
unobservable inputs.