Financial statements Accounting Policies continued For the 52 weeks ended 26 June 2021 IMPAIRMENT OF NON-FINANCIAL ASSETS PROVISIONS The carrying amounts of the Group’s assets are reviewed A provision is recognised in the Consolidated Statement annually at each Consolidated Statement of Financial of Financial Position when the Group has a current legal Position date to determine whether there is any indication or constructive obligation as a result of a past event and of impairment. If any such indication exists, the asset’s it is probable that an outflow of economic benefits will be recoverable amount is estimated. required to settle the obligation, and the amount has been reliably measured. The recoverable amount is the greater of fair value less costs of disposal and value in use. In assessing value in use, the A provision for onerous contracts is recognised when the estimated future cash flows are discounted to their present expected benefit to be derived by the Group from a contract value using a pre-tax discount rate that reflects current is lower than the unavoidable costs of meeting its obligations market assessments of the time-value of money and the risks under the contract. specific to the asset. For an asset that does not generate largely independent cash inflows, the recoverable amount A dilapidations provision is recognised when there is an is determined for assets grouped at the lowestlevels ofr expectation of future obligations relating to the maintenance which there are largely independent cash flows, i.e. the cash- of leasehold properties arising from events such as lease generating unit to which the asset belongs. renewals or terminations. An impairment loss is recognised whenever the carrying NEW STANDARDS AND INTERPRETATIONS amount of an asset or its cash-generating unit exceeds the No new standards, amendments or interpretations, effective recoverable amount. A cash-generating unit has been defined for the first time for the financial period beginning on or after as an individual store or the online business. If an impairment 28 June 2020 have had a material impact on the financial loss is identified for a cash-generating unit, the loss shall be statements of the Group. allocated to reduce the carrying amount of the assets of the unit pro-rated on the basis of the carrying amount of each Certain new accounting standards and interpretations have asset in the unit for both property, plant and equipment and been published that are not yet effective. These standards are right-of-use assets. Impairment losses are recognised in the not expected to have a material impact on the entity in the Consolidated Income Statement. current or future reporting periods and on foreseeable future transactions. SHARE CAPITAL Where the Group purchases its own equity share capital (treasury shares), the consideration paid, including any directly attributable incremental costs, is deducted from equity attributable to the Group’s equity holders until the shares are cancelled or reissued. Where such shares are subsequently sold or reissued, any consideration received net of any directly attributable incremental transaction costs and the related income tax effects, is included in equity attributable to the Company’s equity holders. 196 DUNELM GROUP PLC ANNUAL REPORT & ACCOUNTS 2021