3.
SIGNIFICANT ACCOUNTING POLICIES (CONT'D)
3.7
Financial Instruments
3.7.1
Initial recognition and measurement
A financial asset or a financial liability is recognised in the statement of financial position when,
and only when, the Group and the Company become a party to the contractual provisions of
the instrument.
A financial instrument is recognised initially, at its fair value plus, in the case of a financial
instrument not at fair value through profit or loss, transactions costs that are directly attributable
to the acquisition or issue of the financial instrument.
An embedded derivative is recognised separately from the host contract and accounted for as
a derivative if, and only if, it is not closely related to the economic characteristics and risks of
the host contract and the host contract is not categorised at fair value through profit or loss.
The host contract, in the event an embedded derivative is recognised separately, is accounted
for in accordance with policy applicable to the nature of the host contract.
3.7.2
Financial instrument categories and subsequent measurement
The Group and the Company categorise financial instruments as follows:
Financial assets
(i)
Loans and receivables
Loans and receivables category comprises debt instruments that are not quoted in an
active market.
Financial assets categorised as loans and receivables are subsequently measured at
amortised cost using the effective interest method.
Loans and receivables are classified as current assets, except for those having maturity
dates later than 12 months after the end of the reporting period which are classified as
non-current.
(ii)
Available-for-sale financial assets
Available-for-sale category comprises investment in equity and debt securities instruments
that are not held for trading.
Investments in equity instruments that do not have a quoted market price in an active
market and whose fair value cannot be reliably measured are measured at cost. Other
financial assets categorised as available-for-sale are subsequently measured at their
fair values with the gain or loss recognised in other comprehensive income, except for
impairment losses, foreign exchange gains and losses arising from monetary items
and gains and losses of hedged items attributable to hedge risks of fair value hedges
which are recognised in profit or loss. On derecognition, the cumulative gain or loss
recognised in other comprehensive income is reclassified from equity into profit or loss.
Interest calculated for a debt instrument using the effective interest method is recognised
in profit or loss.
All financial assets, except for those measured at fair value through profit or loss, are
subject to review for impairment.
NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2014 (CONT’D)
•
Pentamaster Corporation Berhad
(572307-U)
Annual Report 2014
53
