WASCO BERHAD 250 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2024 17 DERIVATIVE FINANCIAL ASSETS/(LIABILITIES) (CONTINUED) Group Contract/ notional amount Assets RM’000 Liabilities RM’000 2023 Current Derivative instruments at fair value through profit or loss - Forward currency contracts RM42,523,000 SGD 42,099,000 USD 11,240,000 AUD 211,000 EUR 200,000 154 (4,100) The Company did not hold any derivative financial instruments as at 31 December 2024 (2023: Nil). Recognition and measurement A derivative financial instrument is initially recognised at its fair value on the date the contract is entered into and is subsequently carried at its fair value. The method of recognising the resulting gain or loss depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged. Gains or losses on derivatives that are not designated as a hedging instrument are recognised in profit or loss within ‘other gains/(losses) - net’. The Group and the Company currently do not hedge any of its derivative financial instruments. Forward currency contracts The Group enters into foreign currency forward contracts to protect the Group from movements in exchange rates by establishing the rate at which a foreign currency asset or liability will be settled. Forward currency contracts are mainly used to hedge certain trade receivables and trade payables denominated in United States Dollar, Singapore Dollar, Ringgit Malaysia, and Indonesian Rupiah for which firm commitments existed at the reporting date, extending to June 2026. Gains or losses arising from fair value changes of its financial assets and financial liabilities During the financial year, the Group recognised a loss of RM9,976,000 (2023: RM1,374,000) in the profit or loss arising from fair value changes of its derivative financial assets and liabilities. The method and assumptions applied in determining the fair value of derivatives are disclosed in Note 44.
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