WASCO BERHAD 286 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2024 42 FINANCIAL INSTRUMENTS BY CATEGORY (CONTINUED) (a) Financial assets Classification The Group and the Company classify its financial assets as fair value through profit or loss and at amortised cost. The classification depends on the nature of the entity’s business model for managing the financial assets and the contractual terms of the cash flows. The Group and the Company reclassify debt investments when and only when its business model for managing those assets changes. Recognition and initial measurement Financial assets are initially recognised at fair value plus transaction cost that are directly attributable to the acquisition of the financial assets except for financial assets at fair value through profit or loss. Transaction costs for financial assets measured at fair value through profit or loss are recognised immediately as expenses within profit or loss. Subsequent measurement (i) Debt instruments at amortised cost After initial recognition, financial assets that are held for collection of contractual cash flows where those cash flows represent solely payment of principal and interest are measured at amortised cost using the effective interest method. Any gain or loss arising on derecognition is recognised directly in profit or loss. Impairment losses are recognised in profit or loss. (ii) Debt instruments at fair value through profit or loss Subsequent to initial recognition, financial assets that do not meet the criteria for amortised cost or fair value through other comprehensive income are measured at fair value through profit or loss. Any gains or losses arising from changes in fair value are recognised in profit or loss within ‘other gains/(losses) – net’. Exchange differences, interest and dividend income on financial assets at fair value through profit or loss are recognised separately in profit or loss. (iii) Equity instruments The Group and the Company subsequently measure all equity investments at fair value. Where the Group’s and the Company’s management have elected to present fair value gains and losses on equity investments in other comprehensive income, there is no subsequent reclassification of fair value gains or losses to profit or loss following the derecognition of the investment. Dividends from such investments continue to be recognised in profit or loss as other income when the Group’s and the Company’s right to receive payments is established. Changes in the fair value of financial assets at fair value through profit or loss are recognised in profit or loss within ‘other gains/(losses) – net’.
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