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Notes to the financial statements
31 December 2012
(continued)
Annual Report 2012 KPJ Healthcare Berhad
2. Summary of significant accounting policies (continued)
2.13 Associates (continued)
After application of the equity method, the Group determines whether it is necessary to recognise an additional impairment loss on the Group’s
investment in its associates. The Group determines at each reporting date whether there is any objective evidence that the investment in the associate
is impaired. If this is the case, the Group calculates the amount of impairment as the difference between the recoverable amount of the associate and
its carrying value and recognises the amount in profit or loss.
The financial statements of the associates are prepared as of the same reporting date as the Company. Where necessary, adjustments are made to
bring the accounting policies in line with those of the Group.
In the Company’s financial statements, investments in associates are stated at cost less impairment losses. On disposal of such investments, the
difference between net disposal proceeds and their carrying amounts is included in profit or loss.
2.14 Financial assets
Financial assets are recognised in the statement of financial position when, and only when, the Group and the Company become a party to the
contractual provisions of the financial instrument.
When financial assets are recognised initially, they are measured at fair value, plus, in the case of financial assets not at fair value through profit or loss,
directly attributable transaction costs.
The Group and the Company determine the classification of their financial assets at initial recognition, and the categories include loans and receivables
and available-for-sale financial assets.
(a) Loans and receivables
Financial assets with fixed or determinable payments that are not quoted in an active market are classified as loans and receivables.
Subsequent to initial recognition, loans and receivables are measured at amortised cost using the effective interest method. Gains and losses are
recognised in profit or loss when the loans and receivables are derecognised or impaired, and through the amortisation process.
Loans and receivables are classified as current assets, except for those having maturity dates later than 12 months after the reporting date which
are classified as non-current.
(b) Available-for-sale financial assets
Available-for-sale financial assets are financial assets that are designated as available for sale or are not classified as financial assets at fair value
through profit or loss, loans and receivables or held-to-maturity investments.
After initial recognition, available-for-sale financial assets are measured at fair value. Any gains or losses from changes in fair value of the financial
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 profit or loss. The cumulative gain or loss previously recognised in
other comprehensive income is reclassified from equity to profit or loss as a reclassification adjustment when the financial asset is derecognised.
Interest income calculated using the effective interest method is recognised in profit or loss. Dividends on an available-for-sale equity instrument
are recognised in profit 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 financial assets are classified as non-current assets unless they are expected to be realised within 12 months after the reporting
date.