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Fima Corporation Berhad
(21185-P)
financial statements
108
NOTES TO THE FINANCIAL STATEMENTS
2.
SIGNIFICANT ACCOUNTING POLICIES (Cont’d.)
2.3 Summary of Significant Accounting Policies (Cont’d.)
(n) 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 FRS 139 Financial Instruments: Recognition and Measurement, 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.
(i)
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading or financial
liabilities designated upon initial recognition as at fair value through profit or loss.
Financial liabilities held for trading includes derivatives entered into by the Group 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 gain or losses on derivatives include exchange
differences.
(ii) Other financial liabilities
The Group’s and the Company’s other financial liabilities include trade payables, other payables and amounts
due to related companies.
Trade payables, other payables and amounts due to related companies are recognised initially at fair value plus
directly attributable transaction costs and subsequently measured at amortised cost using the effective interest
method.
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.
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.