125 / 204
Notes To The
Financial Statements
As at 31 March 2019
2.
Significant accounting policies (cont’d.)
2.3 Summary of significant accounting policies (cont’d.)
(j) Financial assets (cont’d.)
Initial recognition and measurement (cont’d.)
The Group’s and the Company’s business model for managing financial assets refers to how it
manages its financial assets in order to generate cash flows. The business model determines whether
cash flows will result from collecting contractual cash flows, selling the financial assets, or both.
Purchases or sales of financial assets that require delivery of assets within a time frame established
by regulation or convention in the market place (regular way trades) are recognised on the trade
date, i.e., the date that the Group and the Company commits to purchase or sell the asset.
Subsequent measurement
For purposes of subsequent measurement, financial assets of the Group and of the Company are
classified as either:
-
Financial assets at amortised cost (debt instruments) (“AC”);
-
Financial assets at fair value through profit or loss (“FVTPL”);
-
Financial assets at FVTOCI with recycling of cumulative gains and losses (debt instruments);
or
-
Financial assets designated at FVTOCI with no recycling of cumulative gains and losses upon
derecognition (equity instruments).
This category is the most relevant to the Group and the Company. The Group and the Company
measures financial assets at amortised cost if both of the following conditions are met:
-
The financial asset is held within a business model with the objective to hold financial assets in
order to collect contractual cash flows; and
-
The contractual terms of the financial asset give rise on specified dates to cash flows that are
solely payments of principal and interest on the principal amount outstanding.
Financial assets at amortised cost (debt instruments)
Financial assets at amortised cost are subsequently measured using the effective interest rate (“EIR”)
method and are subject to impairment. Gains and losses are recognised in profit or loss when the
asset is derecognised, modified or impaired.
The Group’s and the Company’s financial assets at amortised cost include trade and other receivables
and cash and bank balances.
financial
statements
121