of the assets in a binding agreement in an arm's length transaction, adjusted for
incremental costs that would be directly attributed to the disposal of the asset is
used. If there is no binding agreement, but the asset is traded on an active market,
fair value less cost to sell is the asset's market price less cost of disposal. If there
is no binding sale agreement or active market for an asset, the LGU determines
fair value less cost to sell based on the best available information.
For each asset, an assessment is made at each reporting date as to whether there
is any indication that previously recognized impairment losses may no longer
exist or may have decreased. If such an indication exists, the LGU estimates the
asset's recoverable service amount. A previously recognized impairment loss is
reversed only if there has been a change in the assumptions used to determine
the asset’s recoverable service amount since the last impairment loss was
recognized. The reversal is limited so that the carrying amount of the asset does
not exceed its recoverable service amount, nor does it exceed the carrying
amount that would have been determined, net of depreciation, had no
impairment loss been recognized for the asset in prior years. Such reversal is
recognized in surplus or deficit.
3.7 Financial instruments
Financial assets
Initial recognition and measurement
Financial assets are classified as financial assets at fair value through surplus or
deficit, loans and receivables, as appropriate. The LGU determines the
classification of its financial assets at initial recognition.
The LGU financial assets include: cash and short-term deposits; trade and other
receivables; loans and other receivables.
Subsequent measurement
The subsequent measurement of financial assets depends on their classification.
Financial liabilities
Initial recognition and measurement
Financial liabilities within the scope of IPSAS 29 are classified as financial
liabilities at fair value through surplus or deficit or loans and borrowings, as
appropriate. The LGU determines the classification of its financial liabilities at
initial recognition.
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