The company only enters into basic financial instrument transactions that result in the recognition of financial assets and liability like trade and other debtors and creditors, loan from banks and other third parties, loans to related parties and investments in ordinary shares.
Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment is found, an impairment loss is recognised in the statement of income and retained earnings.
For the financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate of the recoverable amount, which is an approximation of the amount that the company would receive for the asset if it were to be sold at the reporting date.