2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.16 Impairment of financial assets (continued)
(b) Available-for-sale financial assets
Significant or prolonged decline in fair value below cost, significant financial difficulties of the issuer or obligor,
and the disappearance of an active trading market are considerations to determine whether there is objective
evidence that investment securities classified as available-for-sale financial assets are impaired.
If an available-for-sale financial asset is impaired, an amount comprising the difference between its cost (net of
any principal payment and amortisation) and its current fair value, less any impairment loss previously recognised
in profit or loss, is transferred from equity to profit or loss.
Impairment losses on available-for-sale equity investments are not reversed in profit or loss in the subsequent
periods. Increase in fair value, if any, subsequent to impairment loss is recognised in other comprehensive income.
For available-for-sale debt investments, impairment losses are subsequently reversed in profit or loss if an
increase in the fair value of the investment can be objectively related to an event occurring after the recognition
of the impairment loss in profit or loss.
2.17 Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and on hand, demand deposits, which are subject to an insignificant
risk of changes in value. These also include bank overdrafts that form an integral part of the Group’s cash management.
2.18 Inventories
Inventories are stated at the lower of cost (determined on the weighted average basis) and net realisable value.
Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of
completion and the estimated costs necessary to make the sale.
2.19 Financial liabilities
Financial liabilities are classified according to the substance of the contractual arrangements entered into and the
definitions of a financial liability.
Financial liabilities, within the scope of MFRS 139, 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. Financial
liabilities are classified as either financial liabilities at fair value through profit or loss or other financial liabilities.
(a) Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial
liabilities designated upon initial recognition at fair value through profit or loss.
Financial liabilities held for trading include derivatives entered into by the Group and the Company that do not meet
the hedge accounting criteria. Derivative liabilities are initially measured at fair value and subsequently stated at
fair value, with any resultant gains or losses recognised in profit or loss. Net gains or losses on derivatives include
exchange differences.
The Group and the Company have not designated any financial liabilities at fair value through profit or loss.
224
KPJ Healthcare Berhad annual report
2014
Notes to the
Financial Statements
For the financial year ended 31 December 2014 (continued)
