2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.12 Financial assets (continued)
(b) Recognition and initial measurement
Regular purchases and sales of financial assets are recognised on the trade-date, the date on which the Group
commits to purchase or sell the asset.
Financial assets are initially recognised at fair value plus transaction costs that are directly attributable to the
acquisition of the financial asset for all financial assets not carried at fair value through profit or loss. Financial
assets at fair value through profit or loss are initially recognised at fair value, and transaction costs are expensed
in profit or loss.
(c) Subsequent measurement – gains and losses
Available-for-sale financial assets and financial assets at fair value through profit or loss are subsequently carried
at fair value. Loans and receivables and held-to-maturity financial assets are subsequently carried at amortised
cost using the effective interest method.
Changes in the fair values of financial assets at fair value through profit or loss, including the effects of currency
translation, interest and dividend income are recognised in profit or loss in the period in which the changes arise.
Changes in the fair value of available-for-sale financial assets are recognised in other comprehensive income,
except for impairment losses (see accounting policy Note 2.11) and foreign exchange gains and losses on
monetary assets (Note 2.33).
Interest and dividend income on available-for-sale financial assets are recognised separately in profit or loss.
Interest on available-for-sale debt securities calculated using the effective interest method is recognised in profit
or loss. Dividends income on available-for-sale equity instruments are recognised in profit or loss when the
Group’s right to receive payments is established.
(d) Subsequent measurement – Impairment
Assets carried at amortised cost
The Group assesses at the end of the reporting period whether there is objective evidence that a financial asset
or group of financial assets is impaired. A financial asset or a group of financial assets is impaired and
impairment losses are incurred only if there is objective evidence of impairment as a result of one or more
events that occurred after the initial recognition of the asset (a ‘loss event’) and that loss event (or events) has
an impact on the estimated future cash flows of the financial asset or group of financial assets that can be
reliably estimated.
Evidence of impairment may include indications that the debtors or a group of debtors is experiencing significant
financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter
bankruptcy or other financial reorganisation, and where observable data indicate that there is a measurable
decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate
with defaults.
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NOTES TO THE
FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2015 (CONTINUED)
