2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.21 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.
(b) Other financial liabilities
Loans and borrowings are recognised initially at fair value, net of transaction costs incurred, and subsequently
measured at amortised cost using the effective interest method. Borrowings are classified as current liabilities
unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the
reporting date.
For other financial liabilities, gains and losses are recognised in profit or loss when the liabilities are derecognised,
and through the amortisation process.
A financial liability is derecognised when the obligation under the liability is extinguished. When an existing
financial liability is replaced by another from the same lender on substantially different terms, or the terms of
an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of
the original liability and the recognition of a new liability, and the difference in the respective carrying amounts
is recognised in profit or loss.
251
KPJ Healthcare Berhad
Annual Report
2015
NOTES TO THE
FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2015 (CONTINUED)
