Page 148 - KPJ_2011

2. Summary of significant accounting policies (continued)
2.14 Financial assets (continued)
(b) Available-for-sale financial assets
Available-for-salemnancialassetsaremnancialassetsthataredesignatedasavailableforsaleorarenotclassimed
as mnancial assets at fair value through promt or loss, loans and receivables or held-to-maturity investments.
After initial recognition, available-for-sale mnancial assets are measured at fair value. Any gains or losses
from changes in fair value of the mnancial asset are recognised in other comprehensive income, except that
impairment losses, foreign exchange gains and losses on monetary instruments and interest calculated
using the effective interest method are recognised in promt or loss. The cumulative gain or loss previously
recognised in other comprehensive income is reclassimed from equity to promt or loss as a reclassimcation
adjustment when the mnancial asset is derecognised. Interest income calculated using the effective
interest method is recognised in promt or loss. Dividends on an available-for-sale equity instrument are
recognised in promt or loss when the Group’s right to receive payment is established.
Investments in equity instruments whose fair value cannot be reliably measured are measured at cost less
impairment loss.
Available-for-sale mnancial assets are classimed as non-current assets unless they are expected to be
realised within 12 months after the reporting date.
A mnancial asset is derecognised where the contractual right to receive cash nows from the asset has
expired. On derecognition of a mnancial asset in its entirety, the difference between the carrying amount
and the sum of the consideration received and any cumulative gain or loss that had been recognised in
other comprehensive income is recognised in promt or loss.
Regular way purchases or sales are purchases or sales of mnancial assets that require delivery of assets
within the period generally established by regulation or convention in the marketplace concerned. All
regular way purchases and sales of mnancial assets are recognised or derecognised on the trade date,
the date that the Group and the Company commit to purchase or sell the asset.
2.15 Impairment of financial assets
The Group and the Company assess at each reporting date whether there is any objective evidence that a
mnancial asset is impaired.
(a) Trade and other receivables and other financial assets carried at amortised cost
To determine whether there is objective evidence that an impairment loss on mnancial assets has been
incurred, the Group and the Company consider factors such as the probability of insolvency or signimcant
mnancial difmculties of the debtor and default or signimcant delay in payments. For certain categories of
mnancial assets, such as trade receivables, receivables that are assessed not to be impaired individually
are subsequently assessed for impairment on a collective basis based on similar risk characteristics.
Objective evidence of impairment for a portfolio of receivables could include the Group’s and the
Company’s past experience of collecting payments, an increase in the number of delayed payments in the
portfolio past the average credit period and observable changes in national or local economic conditions
that correlate with default on receivables.
If any such evidence exists, the amount of impairment loss is measured as the difference between the
asset’s carrying amount and the present value of estimated future cash nows discounted at the mnancial
asset’s original effective interest rate. The impairment loss is recognised in promt or loss.
The carrying amount of the mnancial asset is reduced by the impairment loss directly for all mnancial assets
with the exception of receivables, where the carrying amount is reduced through the use of an allowance
account. When a receivable becomes uncollectible, it is written off against the allowance account.
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 December 2011 (continued)
143 ANNUAL REPORT 2011