2.
Summary of significant accounting policies (cont’d)
2.11 Financial assets (cont’d)
Subsequent measurement (cont’d)
(b) Loans and receivables
Non-derivative financial assets with fixed or determinable payments that are not quoted in an active market are classified
as loans and receivables. Subsequent to initial recognition, loans and receivables are measured at amortised cost using
the effective interest method, less impairment. Gains and losses are recognised in the profit or loss when the loans and
receivables are de-recognised or impaired, and through the amortisation process.
(c) Available-for-sale financial assets
Available-for-sale financial assets include equity and debt securities. Equity investments classified as available-for
sale are those, which are neither classified as held for trading nor designated at fair value through profit or loss. Debt
securities in this category are those which are intended to be held for an indefinite period of time and which may be sold
in response to needs for liquidity or in response to changes in the market conditions.
After initial recognition, available-for sale financial assets are measured at fair value. Any gains or losses from changes
in fair value of the financial assets are recognised in other comprehensive income, except that impairment losses,
foreign exchange gains and losses on monetary instruments and interest calculated using the effective interest method
are recognised in profit or loss. The cumulative gain or loss previously recognised in other comprehensive income is
reclassified from equity to profit or loss as a reclassification adjustment when the financial asset is de-recognised.
(d) Held-to-maturity investments
Non-derivative financial assets with fixed or determinable payments and fixed maturity are classified as held-to-maturity
when the Group has the positive intention and ability to hold the investment to maturity. Subsequent to initial recognition,
held-to-maturity investments are measured at amortised cost using the effective interest method, less impairment. Gains
and losses are recognised in profit or loss when the held-to-maturity investments are de-recognised or impaired, and
through the amortisation process.
NOTES TO THE FINANCIAL STATEMENTS
31 December 2014
Hock Lian Seng Holdings Limited
Annual report 2014
54
