Datasonic Group Berhad Annual Report 2020

DATASONIC GROUP BERHAD I ANNUAL REPORT 2020 (Registration No. 200801008472 (809759-X)) 122 Notes to the Financial Statements for the financial year ended 31 March 2020 (Cont’d) 4. SIGNIFICANT ACCOUNTING POLICIES (CONT’D) 4.4 FINANCIAL INSTRUMENTS (CONT’D) (a) Financial Assets All recognised financial assets are measured subsequently in their entirety at either amortised cost or fair value (through profit or loss, or other comprehensive income), depending on the classification of the financial assets. Debt Instruments (i) Amortised Cost The financial asset is held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest. Interest income is recognised by applying the effective interest rate to the gross carrying amount of the financial asset. When the asset has subsequently become credit-impaired, the interest income is recognised by applying the effective interest rate to the amortised cost of the financial asset. The effective interest method is a method of calculating the amortised cost of a financial asset and of allocating interest income over the relevant period. The effective interest rate is the rate that discounts estimated future cash receipts (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts), excluding expected credit losses, through the expected life of the financial asset or a shorter period (where appropriate). (ii) Fair Value through Other Comprehensive Income The financial asset is held for both collecting contractual cash flows and selling the financial asset, where the asset’s cash flows represent solely payments of principal and interest. Movements in the carrying amount are taken through other comprehensive income and accumulated in the fair value reserve, except for the recognition of impairment, interest income and foreign exchange differencewhich are recognised directly in profit or loss. Interest income is calculated using the effective interest rate method. (iii) Fair Value through Profit or Loss All other financial assets that do not meet the criteria for amortised cost or fair value through other comprehensive income are measured at fair value through profit or loss. The Group reclassifies debt instruments when and onlywhen its business model for managing those assets change, if any. Equity Instruments All equity investments are subsequently measured at fair value with gains and losses recognised in profit or loss except where the Group has elected to present the subsequent changes in fair value in other comprehensive income and accumulated in the fair value reserve at initial recognition. The designation at fair value through other comprehensive income is not permitted if the equity investment is either held for trading or is designated to eliminate or significantly reduce a measurement or recognition inconsistency that would otherwise arise. Dividend income from this category of financial assets is recognised in profit or loss when the Group’s right to receive payment is established unless the dividends clearly represent a recovery of part of the cost of the equity investments.