NOTES TO THE CONSOLIDATED FINANCIAL  STATEMENTS  (RMB AND US$ AMOUNTS EXPRESSED IN THOUSANDS, EXCEPT PER SHARE DATA)  3.  Significant accounting judgments, estimates and assumptions (cont’d) 3.1  Judgments (cont’d) Consolidation of a special purpose entity As disclosed in Note 1.4, HLGE established the Trust with the Trustee pursuant to the Trust Deed to facilitate the  implementation of the HLGE 2006 Scheme. Pursuant to the terms of the Trust Deed, the Trustee will,  inter alia , acquire and hold existing shares in the capital of  HLGE (collectively, the “Trust Shares”) for the benefit of participants who are employees of HLGE and/or its subsidiaries  and who have been granted share options under the HLGE 2006 Scheme (excluding directors of HLGE and directors  and employees of the HLGE’s parent company and its subsidiaries) (the “Beneficiaries”) and transfer such Trust Shares to  the Beneficiaries upon the exercise of their share options under the HLGE 2006 Scheme. HLGE will be entitled, from time to time, during the period commencing from the date of the Trust Deed and ending  upon the termination of the Trust, to appoint a new trustee in substitution of the existing Trustee. HLGE is entitled  to the benefit of any remaining funds, investments or assets which are placed under the control of the Trustee upon  termination of the Trust. Based on the foregoing provisions, HLGE therefore consolidates the Trust as part of HLGE in  its separate and consolidated financial statements. The Trust Shares are not regarded as treasury shares pursuant to  the Singapore Companies Act, Chapter 50 and the Trustee has the power,  inter alia , to vote or abstain from voting in  respect of the Trust Shares at any general meeting of HLGE in its absolute discretion and to waive its right to receive  dividends in respect of the Trust Shares as it deems fit. However, the Trust Shares are accounted for as treasury shares  by HLGE as they are issued by HLGE and held by the Trust, which is considered as part of HLGE in accordance with the  relevant IFRS. The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting 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 described below. The Group based its assumptions and estimates on parameters available when the  consolidated financial statements were prepared. Existing circumstances and assumptions about future developments,  however, may change due to market changes or circumstances arising beyond the control of the Group. Such changes  are reflected in the assumptions when they occur. Impairment exists when the carrying value of an asset or cash-generating unit exceeds its recoverable amount, which  is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation  is based on available data from binding sales transactions, conducted at arm’s length, for similar assets or observable  market prices less incremental costs for disposing of the asset. The value in use calculation is based on a discounted  cash flow (“DCF”) model. The cash flows are derived from the forecasts for the next eight to eleven years and do not  include restructuring activities that the Group is not yet committed to or significant future investments that will  enhance the asset’s performance of the CGU being tested. The recoverable amount is most sensitive to the discount  rate used for the DCF model as well as the expected future cash-inflows and the growth rate used for extrapolation  purposes. The key assumptions used to determine the recoverable amount for the different CGUs and assets, including  a sensitivity analysis, are disclosed and further explained in Note 6 and Note 13. China Yuchai International Limited | Annual Report 2013 65 3.2  Estimates and assumptions Impairment of non-financial assets