Bursa Malaysia Annual Report 2015

FINANCIAL REPORTS

125

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.)

(h) Financial liabilities

Financial liabilities are classified according to the substance of the contractual arrangements entered into and the definition of a financial

liability.

Financial liabilities are recognised in the statements of financial position when, and only when, the Group and the Company become a party

to the contractual provisions of the financial instrument. Financial liabilities are classified as either financial liabilities at FVTPL or other

financial liabilities.

(i) Financial liabilities at FVTPL

Financial liabilities at FVTPL include financial liabilities held for trading and financial liabilities designated upon initial recognition as at

FVTPL.

Financial liabilities are classified as held for trading if they are acquired for the purpose of selling in the near term. This includes

derivatives entered into by the Group and the Company that do not meet the hedge accounting criteria. Derivative liabilities are initially

measured at fair value and subsequently stated at fair value, with any resultant gains or losses recognised in profit or loss. Net gains

or losses on derivatives include exchange differences.

The Group and the Company do not have any financial liabilities at FVTPL in the current and previous financial years.

(ii) Other financial liabilities

Other financial liabilities are recognised initially at fair value plus directly attributable transaction costs and subsequently measured at

amortised cost using the effective interest method.

For other financial liabilities, gains and losses are recognised in profit or loss when the liabilities are derecognised, and through the

amortisation process.

A financial liability is derecognised when the obligation under the liability is extinguished.

When an existing financial liability is replaced by another instrument from the same lender on substantially different terms, or the terms of

an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the

recognition of a new liability, and the difference in the respective carrying amount is recognised in profit or loss.

(i) Fair value measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market

participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or

transfer the liability takes place either in the principal market for the asset or liability or in the absence of a principal market, in the most

advantageous market for the asset or liability. The principal or the most advantageous market must be accessible by the Group and the

Company.

The fair value of an asset or a liability is measured using the assumptions that market participants act in their economic best interest when

pricing the asset or liability.