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GHL Systems Berhad
(293040-D)
NOTES TO THE FINANCIAL STATEMENTS
31 December 2014 (continued)
4. SIGNIFICANT ACCOUNTING POLICIES (continued)
4.10 Financial instruments (continued)
(a) Financial assets (continued)
Cash and cash equivalents include cash and bank balances, bank overdrafts, fixed deposits
pledged to financial institutions, deposits and other short term, highly liquid investments with
original maturities of three (3) months or less, which are readily convertible to cash and are
subject to insignificant risk of changes in value.
A financial asset is derecognised when the contractual right to receive cash flows from the
financial asset has expired. On derecognition of a financial asset in its entirety, the difference
between the carrying amount and the sum of consideration received (including any new
asset obtained less any new liability assumed) and any cumulative gain or loss that had been
recognised directly in other comprehensive income shall be recognised in profit or loss.
A regular way purchase or sale is a purchase or sale of a financial asset under a contract whose
terms require delivery of the asset within the time frame established generally by regulation or
marketplace convention. A regular way purchase or sale of financial assets shall be recognised
and derecognised, as applicable, using trade date accounting.
(b) Financial liabilities
Financial instruments are classified as liabilities or equity in accordance with the substance of the
contractual arrangement. A financial liability is classified into the following two (2) categories
after initial recognition for the purpose of subsequent measurement:
(i) Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss comprise financial liabilities that are
held for trading, derivatives (both, freestanding and embedded) and financial liabilities
that were specifically designated into this classification upon initial recognition.
Subsequent to initial recognition, financial liabilities 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 liabilities classified as at fair value through profit or loss are recognised in profit
or loss. Net gains or losses on financial liabilities 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.
(ii) Other financial liabilities
Financial liabilities classified as other financial liabilities comprise non-derivative financial
liabilities that are neither held for trading nor initially designated as at fair value through
profit or loss.
Subsequent to initial recognition, other financial liabilities are measured at amortised
cost using the effective interest method. Gains or losses on other financial liabilities are
recognised in profit or loss when the financial liabilities are derecognised and through the
amortisation process.
