127 / 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.)
Derecognition
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial
assets) is primarily derecognised (i.e., removed from the Group’s and the Company’s statement of
financial position) when:
-
The rights to receive cash flows from the asset have expired; or
-
The Group and the Company has transferred its rights to receive cash flows from the asset
or has assumed an obligation to pay the received cash flows in full without material delay to
a third party under a ‘pass-through’ arrangement; and either (a) the Group and the Company
has transferred substantially all the risks and rewards of the asset, or (b) the Group and the
Company has neither transferred nor retained substantially all the risks and rewards of the
asset, but has transferred control of the asset.
When the Group and the Company has transferred its rights to receive cash flows from an asset or
has entered into a pass-through arrangement, it evaluates if, and to what extent, it has retained the
risks and rewards of ownership. When it has neither nor retained substantially all of the risks and
rewards of the asset, nor transferred control of the asset, the Group and the Company continues
to recognise the transferred asset to the extent of its continuing involvement. In that case,
the Group and the Company also recognises an associated liability. The transferred asset and the
associated liability are measured on a basis that reflects the rights and obligations that the Group
and the Company has retained.
Continuing involvement that takes the form of a guarantee over the transferred asset is measured
at the lower of the original carrying amount of the asset and the maximum amount of consideration
that the Group and the Company could be required to repay.
(k) Impairment of financial assets
The Group and the Company recognises an allowance for expected credit losses (“ECLs”)
for all debt instruments not held at fair value through profit or loss. ECLs are based on difference
between the contractual cash flows due in accordance with the contract and all the cash flows that
the Group and the Company expects to receive, discounted at an approximation of the original
effective interest rate. The expected cash flows will include cash flows from the sale of collateral held
or other credit enhancements that are integral to the contractual terms.
ECLs are recognised in two stages. For credit exposures for which there has not been a significant
increase in credit risk since initial recognition, ECLs are provided for credit losses that result from
default events that are possible within the next 12-months (a 12-month ECL). For those credit
exposures for which there has been a significant increase in credit risk since initial recognition, a loss
allowance is required for credit losses expected over the remaining life of the exposure, irrespective
of the timing of the default (a lifetime ECL).
financial
statements
123