| (11) | Impairment of Financial Assets |
| A. | Loans and receivables |
| (a) | The Group assesses at the end of each reporting period whether there is objective evidence that a financial asset or group of financial assets is impaired. A financial asset or a group of financial asset is impaired and impairment losses are incurred only if: |
| i. | There is objective evidence of impairment as a result of one or more events that occurred after initial recognition of the asset (a “loss event”), and |
| ii. | That loss event has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated. |
Evidence of impairment includes:
| i. | The debtor or the issuer is experiencing significant financial difficulty; |
| ii. | Default or delinquency in interest or principal payment; |
| iii. | Concessions made to the insolvent debtor by creditors owing to economic or legal considerations; |
| iv. | The probability that the debtor or debtors will enter bankruptcy or other financial reorganization; |
| v. | The disappearance of an active market for that financial asset because of financial difficulties; |
| vi. | Where observable data indicates that there is a measurable decrease in the estimated future cash flow, such as: |
| • | The repayment condition of the debtor to the Group of assets deteriorated |
| • | Changes in areas or economic conditions that correlate with defaults |
| (b) | The Group first assesses whether objective evidence of impairment exists individually for financial assets that are individually significant, and individually or collectively for financial assets that are not individually significant. If the Group determines that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, it includes the asset in a group of financial assets with similar credit risk characteristics and collectively assesses them for impairment. For these assets, the amount of the loss is measured as the difference between the assets’ carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset’s original effective interest rate. The carrying amount of the asset is reduced through the allowance account and the amount of the loss is recognized in the consolidated statement of comprehensive income. In a subsequent period, if the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognized (such as an improvement in the debtor’s credit rating), the reversal of the previously recognized impairment loss is recognized in the consolidated statement of comprehensive income. |
| B. | Available-for-sale assets |
The Group assesses at the end of each reporting period whether there is objective evidence that a financial asset or a group of financial assets is impaired. In the case of equity investments classified as available-for-sale, any significant unfavorable change that takes place in the technical, market, economic, or legal environments where the issuer operates indicates the possibility that the investment cost of the equity instrument may not be recovered and a significant or prolonged decline in the fair value of the security below its cost are evidences that the assets are impaired. If any such evidence exists for available-for-sale financial assets, the cumulative loss—measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognized in profit or loss is removed from equity and recognized in profit or loss. Impairment losses recognized in the consolidated statement of comprehensive income on equity instruments are not reversed through the consolidated statement of comprehensive income in a subsequent period.