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GHL Systems Berhad
(293040-D)
Annual report 2015
Notes to the Financial Statements
31 December 2015 (continued)
4.
SIGNIFICANT ACCOUNTING POLICIES (continued)
4.10 Financial instruments (continued)
(a) Financial assets (continued)
(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.
Cash and cash equivalents consist of cash on hand, balances and deposits with banks
and highly liquid investments which have an insignificant risk of changes in fair value with
original maturities of three (3) months or less, and are used by the Group and the Company
in the management of their short term commitments. For the purpose of the statement of
cash flows, cash and cash equivalents are presented net of bank overdrafts and pledged
deposits.
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.