Annual report 2014
79
NOTES TO THE FINANCIAL STATEMENTS
31 December 2014 (continued)
4. SIGNIFICANT ACCOUNTING POLICIES (continued)
4.10 Financial instruments (continued)
(a) Financial assets (continued)
(i) Financial assets at fair value through profit or loss (continued)
Subsequent to initial recognition, financial assets classified as at fair value through profit or
loss are measured at fair value. Any gains or losses arising from changes in the fair value
of financial assets classified as at fair value through profit or loss are recognised in profit or
loss. Net gains or losses on financial assets classified as at fair value through profit or loss
exclude foreign exchange gains and losses, interest and dividend income. Such income is
recognised separately in profit or loss as components of other income or other operating
losses.
However, derivatives that are linked to and must be settled by delivery of unquoted equity
instruments that do not have a quoted market price in an active market are recognised at
cost.
(ii) Held-to-maturity investments
Financial assets classified as held-to-maturity comprise non-derivative financial assets with
fixed or determinable payments and fixed maturity that the Group has the positive intention
and ability to hold to maturity.
Subsequent to initial recognition, financial assets classified as held-to-maturity aremeasured
at amortised cost using the effective interest method. Gains or losses on financial assets
classified as held-to-maturity are recognised in profit or loss when the financial assets are
derecognised or impaired, and through the amortisation process.
(iii) Loans and receivables
Financial assets classified as loans and receivables comprise non-derivative financial assets
with fixed or determinable payments that are not quoted in an active market.
Subsequent to initial recognition, financial assets classified as loans and receivables are
measured at amortised cost using the effective interest method. Gains or losses on financial
assets classified as loans and receivables are recognised in profit or loss when the financial
assets are derecognised or impaired, and through the amortisation process.
(iv) Available-for-sale financial assets
Financial assets classified as available-for-sale comprise non-derivative financial assets that
are designated as available for sale or are not classified as loans and receivables, held-to-
maturity investments or financial assets at fair value through profit or loss.
Subsequent to initial recognition, financial assets classified as available-for-sale are
measured at fair value. Any gains or losses arising from changes in the fair value of financial
assets classified as available-for-sale are recognised directly in other comprehensive
income, except for impairment losses and foreign exchange gains and losses, until the
financial asset is derecognised, at which time the cumulative gains or losses previously
recognised in other comprehensive income are recognised in profit or loss. However,
interest calculated using the effective interest method is recognised in profit or loss whilst
dividends on available-for-sale equity instruments are recognised in profit or loss when the
right of the Group to receive payment is established.
