2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.12 Financial assets (continued)
(e) De-recognition
Financial assets are de-recognised when the rights to receive cash flows from the investments have expired or
have been transferred and the Group has transferred substantially all risks and rewards of ownership.
Receivables that are factored out to banks and other financial institutions with recourse to the Group are not
derecognised until the recourse period has expired and the risks and rewards of the receivables have been fully
transferred. The corresponding cash received from the financial institutions is recorded as borrowings.
When available-for-sale financial assets are sold, the accumulated fair value adjustments recognised in other
comprehensive income are reclassified to profit or loss.
2.13 Offsetting financial instruments
Financial assets and liabilities are offset and the net amount presented in the statement of financial position when
there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis,
or realise the asset and settle the liability simultaneously. The legally enforceable right must not be contingent on
future events and must be enforceable in the normal course of business and in the event of default, insolvency or
bankruptcy.
2.14 Financial guarantee contracts
Financial guarantee contracts are contracts that require the Group or Company to make specified payments to
reimburse the holder for a loss it incurs because a specified debtor fails to make payments when due, in accordance
with the terms of a debt instrument.
Financial guarantee contracts are recognised as a financial liability at the time the guarantee is issued. The liability is
initially measured at fair value and subsequently at the higher of the amount determined in accordance with MFRS
137 “Provisions, contingent liabilities and contingent assets” and the amount initially recognised less cumulative
amortisation, where appropriate.
The fair value of financial guarantees is determined as the present value of the difference in net cash flows between
the contractual payments under the debt instrument and the payments that would be required without the guarantee,
or the estimated amount that would be payable to a third party for assuming the obligations.
2.15 Leases
(a) As lessee
Finance leases, which transfer to the Group substantially all the risks and rewards incidental to ownership of the
leased item, are capitalised at the inception of the lease at the fair value of the leased asset or, if lower, at the
present value of the minimum lease payments. Any initial direct costs are also added to the amount capitalised.
Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve
a constant rate of interest on the remaining balance of the liability. Finance charges are charged to profit or
loss.
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NOTES TO THE
FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2015 (CONTINUED)
