Key sources of estimation uncertainty. Key assumptions regarding the future and other key sources of estimation uncertainty in the reporting period that may have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities in the next financial year are discussed below. Calculation of the provision for expected credit losses - In measuring the provision for losses, the Corporation uses reasonable and bearable forward-looking information, which is based on assumptions for the future movement of different economic drivers and how these drivers will affect each other. The loss from default is an estimate based on the difference between contractual cash flows due and those the lender would expect to receive, taking into account cash flows from collateral improvements and comprehensive credit. The probability of default is an estimate of the probability of default over a given time horizon, the calculation of which includes historical data, assumptions and expectations of future conditions. Calculation of amortization through the passenger curve - The Corporation uses prospective, reasonable and supportable information in the calculation of the post-pandemic passenger traffic projection in accordance with methodologies used in the industry in the short and long term. The amortization for the period is an estimate based on a ratio of the investments made in the intangible asset, the projected passenger curve through 2041, and the fiscal year's air traffic.
Key sources of estimation uncertainty. The key assumptions concerning the future and other key sources of estimation uncertainty at the balance sheet date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.
Key sources of estimation uncertainty. In the application of the Group’s accounting policies, which are described in note 3, the directors of the Company are required to make estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. The followings are the key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting period, that have a significant risk of causing a material adjustment to the carrying amounts of assets within the next financial year. Net realisable value of inventories Inventories are stated at the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs to completion and estimated selling expenses. The amount written off to the profit or loss is the difference between the carrying value and net realisable value of the inventories. These estimates are based on the current market condition and the historical experience of selling products of a similar nature. It could change significantly as a result of changes in customer preference and competitor actions in response to market conditions. As at 30 June 2014, the carrying amount of inventories is approximately US$56,274,000, net of allowance for inventories of approximately US$982,000 (2013: the carrying amount of inventories is approximately US$59,498,000, net of allowance for inventories of approximately US$1,677,000). 44 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Notes to the Consolidated Financial Statements For the year ended 30 June 2014
