2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.26 Contingencies
A contingent liability is:
(a)
a possible obligation that arises from past events and whose existence will be confirmed only
by the occurrence or non-occurrence of one or more uncertain future events not wholly within
the control of the Group; or
(b)
a present obligation that arises from past events but is not recognised because:
(i)
It is not probable that an outflow of resources embodying economic benefits will be
required to settle the obligation; or
(ii)
The amount of the obligation cannot be measured with sufficient reliability.
A contingent asset is a possible asset that arises from past events and whose existence will be
confirmed only by the occurrence or non-occurrence of one or more uncertain future events not
wholly within the control of the Group.
Contingent liabilities and assets are not recognised on the balance sheet of the Group, except for
contingent liabilities assumed in a business combination that are present obligations and which the
fair values can be reliably determined.
3.
SIGNIFICANT ACCOUNTING JUDGMENTS AND ESTIMATES
The preparation of the Group’s consolidated financial statements requires management to make
judgments, estimates and assumptions that affect the reported amounts of revenues, expenses,
assets and liabilities, and the disclosure of contingent liabilities at the end of each reporting period.
Uncertainty about these assumptions and estimates could result in outcomes that require a material
adjustment to the carrying amount of the asset or liability affected in the future periods.
Management is of the opinion that there is no significant judgment made in applying accounting
policies that have a significant risk of causing a material adjustment to the carrying amounts of assets
and liabilities within the next financial period.
74
NOTES TO THE
FINANCIAL STATEMENTS
For the financial year ended 31 December 2015
HG METAL MANUFACTURING LIMITED
ANNUAL REPORT 2015
