SCC Holdings Berhad Annual Report 2018

SCC Holdings Berhad | Annual Report 2018 .53 NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2018 (CONT’D) 3. Significant Accounting Policies (cont’d) (e) Financial instruments (cont’d) (ii) Financial instrument categories and subsequent measurement (cont’d) Financial liabilities Policy applicable from 1 January 2018 The categories of financial liabilities at initial recognition are as follows: (a) Amortised cost Financial liabilities not categorised as fair value through profit or loss are subsequently measured at amortised cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognised in the profit or loss. Any gains or losses on derecognition are also recognised in the profit or loss. Policy applicable before 1 January 2018 In the previous financial year, financial liabilities of the Group or of Company were subsequently measured at financial liabilities measured at amortised cost. (iii) Regular way purchase or sale of financial assets A regular way purchase or sale of financial assets is recognised and derecognised, as applicable, using trade date or settlement date accounting in the current year. Trade date accounting refers to: (a) the recognition of an asset to be received and the liability to pay for it on the trade date, and (b) derecognition of an asset that is sold, recognition of any gain or loss on disposal and the recognition of a receivable from the buyer for payment on the trade date. Settlement date accounting refers to: (a) the recognition of an asset on the day it is received by the Group or the Company, and (b) derecognition of an asset and recognition of any gain or loss on disposal on the day that is delivered by the Company. Any change in the fair value of the asset to be received during the period between the trade date and the settlement date is accounted in the same way as it accounts for the acquired asset. Generally, the Group or the Company applies settlement date accounting unless otherwise stated for the specific class of asset. (iv) Financial guarantee contracts A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due in accordance with the original or modified terms of a debt instrument. Policy applicable from 1 January 2018 Financial guarantees issued are initially measured at fair value. Subsequently, they are measured at higher of: • the amount of the loss allowance; and • the amount initially recognised less, when appropriate, the cumulative amount of income recognised in accordance to the principles of MFRS 15 Revenue from Contracts with Customers. Liabilities arising from financial guarantees are presented together with other provisions.