Yinson Annual Report 2019

135 Yinson Group Overview Strategy and Sustainability Governance Accountability Annual General Meeting 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 2.17 Financial instruments (continued) Accounting policies applied until 31 January 2018 (continued) (i) Financial assets (continued) (c) Derecognition A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognised (i.e. removed from the Group’s consolidated statement of financial position) when: - the rights to receive cash flow from the asset have expired; or - the Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either (a) the Group has transferred substantially all the risks and rewards of the asset, or (b) the Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset. When the Group has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Group continues to recognise the transferred asset to the extent of the Group’s continuing involvement. In that case, the Group also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Group has retained. Continuing involvement that takes the formof a guarantee over the transferred asset ismeasured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Group could be required to repay. (ii) Impairment of financial assets Accounting policies applied from 1 February 2018 The Group and the Company assess on a forward looking basis the expected credit loss (“ECL”) associated with its debt instruments carried at amortised cost. The impairment methodology applied depends on whether there has been a significant increase in credit risk. The Group and the Company have three types of financial instruments that are subject to the ECL model: (i) Trade and other receivables (ii) Finance lease receivables (iii) Cash and bank balances While cash and bank balances are also subject to the impairment requirements of MFRS 9, the identified impairment loss was immaterial. ECL represent a probability-weighted estimate of the difference between present value of cash flows according to contract and present value of cash flows theGroup and theCompany expect to receive, over the remaining life of the financial instrument. For financial guarantee contracts, theECL is the differencebetween the expected payments to reimburse the holder of the guaranteed debt instrument less any amounts that the Company expects to receive from the holder, the debtor or any other party.