5. SIGNIFICANT ACCOUNTING POLICIES
a| Financial Instruments

I. Recognition and Initial Measurement

A financial instrument is any contract that gives rise to
a financial asset of one entity and a financial liability
or equity instrument of another entity. All financial
assets and liabilities are recognized at fair value
on initial recognition, except for trade receivables
(without a significant financing component) which
are initially recognized at transaction price.

Transaction costs that are directly attributable to the
acquisition or issue of financial assets and financial
liabilities, which are not at fair value through profit
or loss, are added to or deducted from the fair value
of the financial assets or financial liabilities, as
appropriate, on initial recognition. Transaction costs
directly attributable to the acquisition of financial
assets or financial liabilities at fair value through
profit and loss are recognized immediately in profit
and loss.

II. Financial Assets

i. Classification of financial assets

Classification and measurement of financial assets
depends on the results of the business model test
and the Solely Payments of Principal and Interest
('SPPI').

Business Model Test: The Company determines the
business model at a level that reflects how Company's
financial assets are managed together to achieve
a particular business objective. This assessment
includes judgement reflecting all relevant evidence
including how the performance of the assets is
evaluated and their performance measured, the
risks that affect the performance of the assets and
how these are managed and how the managers of
the assets are compensated. The Company monitors
financial assets measured at amortized cost or fair
value through other comprehensive income that are
derecognized prior to their maturity to understand
the reason for their disposal and whether the
reasons are consistent with the objective of the
business for which the asset was held. Monitoring

is part of the Company's continuous assessment of
whether the business model for which the remaining
financial assets are held continues to be appropriate
and if it is not appropriate whether there has been
a change in business model and so a prospective
change to the classification of those assets.

The Solely Payments of Principal and Interest (SPPI)
test as a second step of its classification process,
the Company assesses the contractual terms of
financial assets to identify whether they meet the
SPPI test. 'Principal' for the purpose of this test is
defined as the fair value of the financial asset at
initial recognition and may change over the life of the
financial asset (for example, if there are repayments
of principal or amortization of the premium/
discount). In making this assessment, the Company
considers whether the contractual cash flows are
consistent with a basic lending arrangement i.e.
interest includes only consideration for the time
value of money, credit risk, other basic lending
risks and a profit margin that is consistent with a
basic lending arrangement. Where the contractual
terms introduce exposure to risk or volatility that are
inconsistent with a basic lending arrangement, the
related financial asset is classified and measured at
fair value through profit or loss.

Basis the above tests for purposes of subsequent
measurement, financial assets are classified in
three categories:

• Financial asset at amortized cost

• Financial asset at fair value through other
comprehensive income (FVTOCI)

• Financial assets at fair value through profit and
loss (FVTPL)

Amortized Cost

A financial asset that meets the following conditions
is subsequently measured at amortized cost (except
for financial asset that are designated as at fair
value through profit or loss on initial recognition):

• the asset is held within a business model whose
objective is to hold assets in order to collect
contractual cash flows; and

• The contractual terms of the instrument give
rise on specified dates to cash flows that are
solely payments of principal and interest on the
principal amount outstanding.

Fair value through other comprehensive income
[FVTOCI]

Financial assets that meet the following conditions
are subsequently measured at fair value through
other comprehensive income (except for financial

that are not credit impaired upon origination, the
portion of the lifetime ECL associated with the
probability of default events occurring within the
next 12 months is recognized. Exposures with days
past due (DPD) less than or equal to 30 days are
classified as stage 1.

Stage 2

For credit exposures where there has been a
significant increase in credit risk since initial
recognition but that are not credit impaired, a
lifetime ECL is recognized. Exposures with DPD
range of 31-90 days are classified as stage 2. At
each reporting date, the Company assesses whether
there has been a significant increase in credit risk
for underlying loan assets since initial recognition
by comparing the risk of default occurring over the
expected life between the reporting date and the
date of initial recognition.

Stage 3

Loan asset is assessed as credit impaired when one
or more events that have a detrimental impact on
the estimated future cash flows of that asset have
occurred. For loan assets that have become credit
impaired, a lifetime ECL is recognized on principal
outstanding as at period end. Exposures with DPD
equal to or more than 90 days are classified as
stage 3.

Significant increase in credit risk

For loan assets, the date that the Company becomes
a party to the contract with borrowers is considered
to be the date of initial recognition for the purposes
of assessing the financial instrument for impairment.

In assessing whether there has been a significant
increase in the credit risk since initial recognition of
a loan asset, the Company considers the changes
in the risk that the specified borrower will default
on the contract. The Company compares the risk
of a default occurring on the loan asset as at the
reporting date with the risk of a default occurring
on the loan asset as at the date of initial recognition
and considers both quantitative and qualitative
information that is reasonable and supportable,
including historical experience and forward- looking
information that is available without undue cost
or effort.

The definition of default for the purpose of
determining ECLs has been aligned to the Reserve
Bank of India definition of default, which considers
indicators that the borrower is unlikely to pay and
is no later than when the exposure is equal to or
more than 90 days past due. If one facility of the
borrower is classified as Stage 3, all the facilities of
that borrower are treated as Stage 3.

Measurement and recognition of expected credit
losses

The measurement of all expected credit losses for
loan assets held at the reporting date are based
on historical experience, current conditions,
and reasonable and supportable forecasts. The
measurement of expected credit losses is a function
of the probability of default (PD), loss given default
(LGD) (i.e. the magnitude of the loss if there is a
default) and the exposure at default (EAD). The
measurement of ECL involves increased complexity
and judgement, including estimation of PDs, LGD,
a range of unbiased future economic scenarios,
estimation of expected lives and estimation of EAD,
management overlay and assessing significant
increases in credit risk. The assessment of the
probability of default and loss given default is
based on historical data adjusted by forward-looking
information. As for the exposure at default, for
financial assets, this is represented by the assets'
gross carrying amount at the reporting date; for
loan assets, the exposure includes the amount
outstanding as at the reporting date, together with
expected drawdowns on committed facilities (if any)
in the future by default date determined based on
historical trend, the Company's understanding of the
specific future financing needs of the borrowers, and
other relevant forward-looking information.

The Elements of ECL: The Company calculates
ECLs based on probability weighted scenarios to
measure the expected cash shortfalls, discounted
at an approximation to the EIR. A cash shortfall is
the difference between the cash flows that are
due to the Company and the cash flows that the
Company expects to receive. The mechanics of the
ECL calculations are outlined below and the key
elements are, as follows:

Probability of Default (PD) - The Probability of Default
is an estimate of the likelihood of default over a
given time horizon. A default may only happen at a
certain time over the assessed period, if the facility
has not been previously derecognized and is still in
the portfolio.

a) The Company has applied 12 months PD to
Stage 1 Advances

b) The Lifetime PD is computed using basic
exponentiation technique after considering
the residual maturity of the respective loan for
Stage 2 Advances.

c) PD of 100% is considered for Stage 3 Advances.

Exposure at Default (EAD) - EAD is taken as the
gross exposure under a facility upon default of an
obligor. The amortized principal and the interest
accrued is considered as EAD for the purpose of
ECL computation

Loss Given Default (LGD) - The Loss Given Default
is an estimate of the loss arising in the case where
a default occurs at a given time. It is based on the
difference between the contractual cash flows due
and those that the lender would expect to receive,
including from the realization of any collateral. It is
usually expressed as a percentage of the EAD.

The Company recognizes an impairment gain or loss
in profit or loss for all financial instruments with a
corresponding adjustment to their carrying amount
through a loss allowance account, except for
investments in debt instruments that are measured
at FVTOCI, for which the loss allowance is recognized
in other comprehensive income and accumulated in
a separate component of equity wherein fair value
changes are accumulated, and does not reduce
the carrying amount of the financial asset in the
balance sheet.

In its ECL models, the Company relies on a broad range
of forward-looking macro parameters and estimated
the impact on the default at a given point of time.
The Company regularly monitors the effectiveness
of the criteria used to identify whether there has
been a significant increase in credit risk and revises
them as appropriate to ensure that the criteria are
capable of identifying significant increase in credit
risk before the amount becomes past due.

iii. De-recognition of financial assets

The Company derecognizes a financial asset when
the contractual rights to the cash flows from the
asset expire, or when it transfers the financial
asset and substantially all the risks and rewards
of ownership of the asset to another party. If the
Company neither transfers nor retains substantially
all the risks and rewards of ownership and continues
to control the transferred asset, the Company
recognizes its retained interest in the asset and an
associated liability for amounts it may have to pay.
If the Company retains substantially all the risks
and rewards of ownership of a transferred financial
asset, the Company continues to recognize the
financial asset and also recognizes a collateralized
borrowing for the proceeds received.

De-recognition due to modification of terms
and conditions

The Company de-recognizes a financial asset, when
the terms and conditions have been renegotiated
to the extent that, substantially it becomes a
new loan, with the difference recognized as a
derecognition gain or loss, to the extent that an
impairment loss has not already been recognized. If
the modification does not result in cash flows that
are substantially different, the modification does
not result in derecognition. Based on the change
in cash flows discounted at the original EIR, the

Company recognize a modification gain or loss, to
the extent that an impairment loss has not already
been recognized.

III. Financial liabilities and equity instruments

i. Classification as debt or equity

Debt and equity instruments issued by the Company
are classified as either financial liabilities or as
equity in accordance with the substance of the
contractual arrangements and the definitions of a
financial liability and an equity instrument.

ii. Equity Instruments

An equity instrument is any contract that evidences
a residual interest in the assets of the Company after
deducting all of its liabilities. Equity instruments
issued by the Company are recognized at the
proceeds received, net of direct issue costs.

iii. Financial liabilities

Financial liabilities are subsequently carried at
amortized cost using the effective interest method,
except for contingent consideration recognized in a
business combination (if any) which is subsequently
measured at fair value through profit or loss. The
carrying amounts of financial liabilities that are
subsequently measured at amortized cost are
determined based on the effective interest method.

The effective interest method is a method of
calculating the amortized cost of a financial liability
and of allocating interest expense over the relevant
period. The effective interest rate is the rate that
exactly discounts estimated future cash payments
(including all fees and points paid or received that
form an integral part of the effective interest rate,
transaction costs and other premiums or discounts)
through the expected life of the financial liability,
or (where appropriate) a shorter period, to the net
carrying amount on initial recognition.

iv. De-recognition of financial liabilities

The Company derecognizes financial liabilities
when, and only when, the Company's obligations
are discharged, cancelled or have expired. An
exchange with a lender of debt instruments with
substantially different terms is accounted for as
an extinguishment of the original financial liability
and the recognition of a new financial liability.
Similarly, a substantial modification of the terms of
an existing financial liability (whether attributable to
the financial difficulty of the debtor) is accounted for
as an extinguishment of the original financial liability
and the recognition of a new financial liability. The
difference between the carrying amount of the

financial liability derecognized and the consideration
paid and payable is recognized in profit or loss.

v. Offsetting

Financial assets and financial liabilities are offset,
and the net amount presented in the balance
sheet when, and only when, the Company currently
has a legally enforceable right to set off the
amounts and it intends either to settle them on
a net basis or to realize the asset and settle the
liability simultaneously.

vi. Write offs

The gross carrying amount of a financial asset is
written off when there is no realistic prospect of
further recovery. This is generally the case when
the Company determines that the debtor/ borrower
does not have assets or sources of income that
could generate sufficient cash flows to repay the
amounts subject to the write-off. However, financial
assets that are written off could still be subject
to enforcement activities under the Company's
recovery procedures, considering legal advice where
appropriate. Any recoveries made against or from
written off assets are recognized in Statement of
profit and loss.

b| Revenue Recognition

Revenue is recognized to the extent it is probable that
the economic benefits will flow to the Company and the
revenue can be reliably measured. However, where the
ultimate collection of revenue lacks reasonable certainty,
revenue recognition is postponed.

Revenue is recognized by allocating the transaction
price, net of variable consideration, to the performance
obligations. Variable considerations include discounts
and schemes offered as part of the contract. The net
transaction price for each obligation represents the
revenue recognized for its satisfaction.

i. Interest income

Interest income is recognized in Statement of profit
and loss using the effective interest method for
all financial instruments measured at amortized
cost. The 'effective interest rate' is the rate that
exactly discounts estimated future cash payments
or receipts through the expected life of the financial
instrument to the gross carrying amount of the
financial assets.

The calculation of the effective interest rate includes
transaction costs and fees that are an integral part
of the contract. The Company recognizes interest
income using a rate of return that represents the
best estimate of a constant rate of return over the
expected life of the loan. Hence, it recognizes the

effect of potentially different interest rates charged
at various stages, and other characteristics of the
product life cycle (including prepayments, penalty
interest and charges). Transaction costs include
incremental costs that are directly attributable to
the acquisition of financial asset.

If expectations regarding the cash flows on the
financial asset are revised for reasons other than
credit risk, the adjustment is recorded as a positive
or negative adjustment to the carrying amount of
the asset in the balance sheet with an increase
or reduction in interest income. The adjustment is
subsequently amortized through Interest income in
the Statement of profit and loss.

The Company calculates interest income by applying
the EIR to the gross carrying amount of financial
assets other than credit-impaired assets.

For credit-impaired financial assets the interest
income is calculated by applying the EIR to the
amortized cost of the credit-impaired financial
assets (i.e. the gross carrying amount less the
allowance for expected credit losses.

ii. Interest income on deposits with banks

Interest income from deposits with banks is
recognized on time proportion basis taking into
account the outstanding amount and the applicable
rate of interest.

iii. Net gain/loss on fair value changes

Any differences between the fair values of financial
assets classified as fair value through the profit or
loss, held by the Company on the balance sheet
date is recognized as an unrealized gain/loss. In
cases there is a net gain in the aggregate, the same
is recognized in "Net gains on fair value changes"
under Revenue from operations and if there is a net
loss the same is disclosed under "Expenses - Net
Loss on fair value changes" in the statement of profit
and loss.

Similarly, any realized gain or loss on sale of financial
instruments measured at FVTPL is recognized in net
gain / loss on fair value changes.

iv. Loan Processing Fees

Processing fees on loans is collected towards
processing of loan, this is amortized on EIR basis
over the contractual life of the loan. Related cost
incurred towards processing of loans is netted off
against loan processing fees.

v. Fee Income

Fees and commissions are recognized when the
Company satisfies the performance obligation, at
fair value of the consideration received or receivable.

Foreclosure charges are collected from loan
customers for early payment/ closure of loan and
are recognized on realization. Initial money Deposit
charges are collected from customers for document
processing, which is non-refundable in the nature.
Initial money Deposit charges are recognized in
statement of profit and loss as fee income using
EIR method on disbursed cases. On non-disbursed
cases, it is taken to statement of profit and loss
on realization.

vi. Other operational revenue

Other operational revenue represents income earned
from the activities incidental to the business and is
recognized when the right to receive the income is
established as per the terms of the contract.

c| Employee benefits

The Company's employee benefits mainly include salaries
and bonuses, defined contribution plans (i.e. provident
funds and employee state insurance scheme), defined
benefits plans (i.e. gratuity) and other long-term employee
benefits (i.e. compensated absences). The employee
benefits are recognized in the year in which the associated
services are rendered by the Company employees.

I. Short-term employee benefits

A liability is recognized for short-term employee
benefits accruing to employees in respect of
salaries, short term compensated absences,
performance incentives etc. in the period the related
service is rendered at the undiscounted amount of
the benefits expected to be paid in exchange for
that service.

Accumulated leave, which is expected to be utilized
within the next twelve months, is treated as short¬
term employee benefit. The Company measures the
expected cost of such absences as the additional
amount that it expects to pay as a result of the
unused entitlement that has accumulated at the
reporting date.

II. Post-Employment Employee Benefits

i. Defined contribution plans

The contributions to defined contribution plans are
recognized in profit or loss as and when the services
are rendered by employees. The Company has no
further obligations under these plans beyond its
periodic contributions.

ii. Defined benefits plans

For defined benefit plans, the cost of providing
benefits is determined using the projected unit
credit method, with actuarial valuations being
carried out at the end of each annual reporting

period. Remeasurement, comprises actuarial gains
and losses which is reflected immediately in the
balance sheet with a charge or credit recognized in
other comprehensive income in the period in which
they occur. Remeasurement recognized in other
comprehensive income is reflected immediately in
retained earnings and is not reclassified to profit
or loss. Past service cost is recognized in profit
or loss in the period of a plan amendment. Net
interest is calculated by applying the discount rate
at the beginning of the period to the net defined
benefit liability or asset. Defined benefit costs are
categorized as follows:

• service cost (including current service cost,
past service cost, as well as gains and losses
on curtailments and settlements);

• net interest expense or income; and

• remeasurement

III. Other Long-term employee benefits

The Company treats accumulated leave expected
to be carried forward beyond twelve months, as
long-term employee benefit for measurement
purposes. Such long-term compensated absences
are provided for based on the actuarial valuation
using the projected unit credit method at the year-
end. Actuarial gain/loss are immediately taken to the
statement of profit and loss and are not deferred.

IV. Share-based payments

Employees of the Company also receive remuneration
in the form of share-based payment transactions
under Company's Employee stock option plan (ESOP)-
2020.

The grant date fair value of equity settled share-
based payment awards granted to employees
is recognized as an employee expense, with a
corresponding increase in equity, over the period
that the employees unconditionally become entitled
to the awards. The amount recognized as expense is
based on the estimate of the number of awards for
which the related service conditions are expected to
be met, such that the amount ultimately recognized
as an expense is based on the number of awards
that do meet the related service conditions at the
vesting date.

d| Finance costs

Finance costs on borrowings is paid towards availing of
loan, is amortized on EIR basis over the contractual life of
loan. The EIR in case of a financial liability is computed:

a. As the rate that exactly discounts estimated future
cash payments through the expected life of the
financial liability to the gross carrying amount of
the amortized cost of a financial liability.

b. By considering all the contractual terms of the
financial instrument in estimating the cash flows

c. I ncluding all fees paid between parties to the
contract that are an integral part of the effective
interest rate, transaction costs, and all other
premiums or discounts.

e| Leases

The Company's leased assets primarily consist of leases
for office Space. The Company assesses whether a
contract contains a lease, at inception of a contract. A
contract is, or contains, a lease if the contract conveys
the right to control the use of an identified asset for a
period of time in exchange for consideration. To assess
whether a contract conveys the right to control the use
of an identified asset, the Company assesses whether: (I)
the contract involves the use of an identified asset (ii) the
Company has substantially all of the economic benefits
from use of the asset through the period of the lease
and (iii) the Company has the right to direct the use of
the asset.

At the date of commencement of the lease, the
Company recognizes a right-of-use asset ("ROU") and a
corresponding lease liability for all lease arrangements
in which it is a lessee, except for leases with a term of
twelve months or less (short-term leases) and low value
leases. For these short-term and low value leases, the
Company recognizes the lease payments as an operating
expense on a straight-line basis over the term of the lease
or another systematic basis.

Certain lease arrangements include the options to extend
or terminate the lease before the end of the lease term.
ROU assets and lease liabilities includes periods covered
by extension options when it is reasonably certain that
they will be exercised and includes periods covered by
termination options when it is reasonably certain that
they will not be exercised.

The right-of-use assets are initially recognized at cost,
which comprises the initial amount of the lease liability
adjusted for any lease payments made at or prior to the
commencement date of the lease plus any initial direct
costs less any lease incentives. They are subsequently
measured at cost less accumulated depreciation and
impairment losses. Right-of-use assets are depreciated
from the commencement date on a straight-line basis
over the shorter of the lease term and useful life of the
underlying asset unless the lease transfers ownership
of the underlying asset to the Company by the end of
the lease term or the cost of the right-of-use asset
reflect that the Company exercise a purchase option.
The Company applies Ind AS 36 to determine whether a
ROU asset is impaired and accounts for any identified
impairment loss as described in the accounting policy
below on "Impairment of non- financial assets".

The lease liability is initially measured at amortized
cost at the present value of the future lease payments
that are not paid at the commencement date. The lease
payments are discounted using the interest rate implicit
in the lease or, if not readily determinable, using the
Company's incremental borrowing rates. Lease liabilities
are remeasured with a corresponding adjustment to
the related right of use asset (or in profit or loss if the
carrying amount of the right-of-use asset has been
reduced to zero) if the Company changes its assessment
whether it will exercise an extension or a termination or a
purchase option.

The interest cost on lease liability (computed using
effective interest method), is expensed off in the
statement of profit and loss. Lease liability and ROU asset
have been separately presented in the Balance Sheet and
lease payments have been classified as financing cash
flows. The Company accounts for each lease component
within the contract as a lease separately from non-lease
components of the contract in accordance with Ind AS 116
and allocates the consideration in the contract to each
lease component on the basis of the relative stand-alone
price of the lease component and the aggregate stand¬
alone price of the non-lease components.

f| Property, plant, and equipment |PPE|

Recognition and measurement

Property, plant and equipment are stated in the
balance sheet at cost less accumulated depreciation
and accumulated impairment losses. When significant
parts of property, plant and equipment are required to
be replaced at intervals, the Company depreciates then
separately based on their specific useful lives.

Cost of an item of property, plant and equipment
comprises its purchase price, including import duties and
non-refundable purchase taxes, after deducting trade
discounts and rebates, any directly attributable cost of
bringing the item to its working condition for its intended
use and estimated costs of dismantling and removing
the item and restoring the site on which it is located. The
cost of a self- constructed item of property, plant and
equipment comprises the cost of materials and direct
labor, any other costs directly attributable to bringing
the item to working condition for its intended use, and
estimated costs of dismantling and removing the item and
restoring the site on which it is located. Cost includes,
for qualifying assets, borrowing costs capitalized in
accordance with the Company's accounting policy. Such
properties are classified to the appropriate categories of
property, plant and equipment when completed and ready
for intended use. Depreciation of these assets, on the
same basis as other property assets, commences when
the assets are ready for their intended use.

Subsequent costs relating to an item of Property, Plant
and Equipment are recognized in the carrying amount of
the item if the recognition criteria are met.

Advances paid towards the acquisition of property,
plant and equipment outstanding at each balance
sheet date are disclosed separately under other
non-financial assets.

Depreciation

Depreciation is calculated using the straight line
method to write down the cost of property and
equipment to their residual values over their
estimated useful lives as specified under schedule II
of the Companies Act, 2013. Land is not depreciated.

The estimated useful lives used for computation of
depreciation are as follows:

The useful lives, residual values and depreciation
method of property, plant and equipment are
reviewed, and adjusted appropriately, at-least as
at each financial year end so as to ensure that the
method and period of depreciation are consistent
with the expected pattern of economic benefits from
these assets. Depreciation is provided on a pro-rata
basis from the date on which such asset is ready for
its intended use.

The effect of any change in the estimated useful
lives, residual values and /or depreciation method
are accounted prospectively, and accordingly the
depreciation is calculated over the property, plant
and equipment's remaining revised useful life.

An item of property, plant and equipment is
derecognized upon disposal or when no future
economic benefits are expected to arise from
the continued use of the asset. The gain or loss
arising on the disposal or retirement of an asset
is determined as the difference between the sales
proceeds and the carrying amount of the asset and
is recognized in profit or loss.

g| Intangible assets

I ntangible assets are recognized when the Company
controls the asset, it is probable that future economic
benefits attributed to the asset will flow to the Company
and the cost of the asset can be measured reliably.

The intangible assets are initially recognized at cost.
These assets having finite useful life are carried at cost
less accumulated amortization and any impairment
losses. Amortization is computed using the straight-line
method over the expected useful life of intangible assets.

The estimated useful lives and amortization method are
reviewed, and adjusted appropriately, at least at each
financial year end so as to ensure that the method and
period of amortization are consistent with the expected
pattern of economic benefits from these assets. The
effect of any change in the estimated useful lives and/
or amortization method is accounted for prospectively,
and accordingly the amortization is calculated over the
remaining revised useful life.

An intangible asset is derecognized on disposal, or when
no future economic benefits are expected from use or
disposal. Gains or losses arising from derecognition of
an intangible asset, measured as the difference between
the net disposal proceeds and the carrying amount of the
asset, and are recognized in profit or loss when the asset
is derecognized.

| Capital work-in-progress (CWIP|

Capital Work in Progress (CWIP) of intangible assets refers
to the costs incurred on the acquisition or development of
intangible assets that are not yet ready for their intended
use. Such costs are capitalized until the intangible assets
are ready for use. CWIP of intangible assets are capitalized
if they meet the following criteria:

• The Company has control over the asset or rights to it

• It is probable that the future economic benefits
associated with the asset will flow to the Company

• The cost of the asset can be reliably measured

Impairment of non-financial assets

At the end of each reporting period, the Company reviews
the carrying amounts of its assets to determine whether
there is any indication that those assets have suffered
an impairment loss. If any such indication exists, the
recoverable amount of the asset is estimated in order to
determine the extent of the impairment loss (if any).

Recoverable amount is the higher of fair value less costs
of disposal and value in use. In assessing value in use,
the estimated future cash flows are discounted to their
present value using a pre-tax discount rate that reflects
current market assessments of the time value of money
and the risks specific to the asset for which the estimates
of future cash flows have not been adjusted.

If the recoverable amount of an asset is estimated to be
less than its carrying amount, the carrying amount of the
asset is reduced to its recoverable amount. An impairment
loss is recognized immediately in profit or loss.

When an impairment loss subsequently reverses,
the carrying amount of the asset is increased to the
revised estimate of its recoverable amount, but so that
the increased carrying amount does not exceed the
carrying amount that would have been determined had
no impairment loss been recognized for the asset in prior

years. A reversal of an impairment loss is recognized
immediately in profit or loss.