Bursa Malaysia Annual Report 2015

FINANCIAL REPORTS

123

Bursa Malaysia •

Annual Report 2015

NOTES TO THE

FINANCIAL STATEMENTS

31 DECEMBER 2015

2. Significant accounting policies (cont’d.)

2.4 Summary of significant accounting policies (cont’d.)

(e) Financial assets (cont’d.)

(iii) HTM investments

Financial assets with fixed or determinable payments and fixed maturity are classified as HTM when the Group and the Company have

the positive intention and ability to hold the investments to maturity.

Subsequent to initial recognition, HTM investments are measured at amortised cost using the effective interest method. Gains and

losses are recognised in profit or loss through the amortisation process and when the HTM investments are impaired or derecognised.

HTM investments are classified as non-current assets, except for those having maturity within 12 months after the financial year end

which are classified as current.

(iv) AFS financial assets

AFS financial assets are financial assets that are designated as such or are not classified in any of the three preceding categories.

After initial recognition, AFS 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 derecognised. Interest income calculated using the effective interest method is recognised in profit or loss.

Dividends on an AFS equity instrument are recognised in profit or loss when the Group’s and the Company’s right to receive payment

is established.

AFS financial assets which are not expected to be realised within 12 months after the financial year end are classified as non-current

assets.

A financial asset is derecognised when the contractual right to receive cash flows from the asset has expired. On derecognition of a financial

asset in its entirety, the difference between the carrying amount and the sum of the consideration received and any cumulative gain or loss

that had been recognised in other comprehensive income is recognised in profit or loss.

Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the period generally

established by regulation or convention in the marketplace concerned. All regular way purchases and sales of financial assets are recognised

or derecognised on the settlement date, i.e. the date that the asset is delivered to or by the Group and the Company.

(f) Impairment of financial assets

The Group and the Company assess at each financial year end whether there is any objective evidence that a financial asset is impaired.

(i) Loans and receivables and HTM investments

To determine whether there is objective evidence that an impairment loss on financial assets has been incurred, the Group and the

Company consider factors such as the probability of insolvency or significant financial difficulties of the debtor, default or significant

delay in payments, and delinquency in interest or principal payments and other financial reorganisation where observable data indicate

that there is a measurable decrease in the estimated future cash flows.