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AFRICAN DAWN Annual Report 2016

Accounting Policies continued Initial measurement Financial instruments that are categorised and designated at initial recognition as being at fair value through profit or loss are recognised at fair value. Transaction costs, which are directly attributable to the acquisition or on issue of these financial instruments, are recognised immediately in profit and loss. Financial instruments that are not carried at fair value through profit or loss are initially measured at fair value plus transaction costs that are directly attributable to the acquisition or issue of the financial instruments. Classification Financial assets are classified into the following categories: • Financial assets at fair value through profit or loss; • Held-to-maturity investments; • Loans and receivables; and • Available-for-sale financial assets. Financial liabilities are classified into the following categories: • Financial liabilities at fair value through profit or loss; and • Financial liabilities at amortised cost. The Group has no financial instruments that are classified as at fair value though profit or loss, available for sale or held to maturity. The remaining categories are explained further below. Loans and receivables Subsequent measurement Subsequent to initial measurement, financial instruments are either measured at fair value or amortised cost, depending on their classification. The Group has no financial instruments that are subsequently measured at fair value. Financial liabilities at amortised cost Such liabilities are measured at amortised costs using the effective interest rate. Loans and receivables Loans and receivables are measured at amortised cost using the effective interest rate method, less an allowance for impairment losses. All of the group’s trade debtors are included in the loans and receivables category. These advances arise when the Group provides money, goods or services directly to a debtor with no intention to trade the receivable. Loans and advances originated by the Group are generally in the form of short-term personal unsecured loans that are paid back in fixed equal instalments with terms of 1 to 6 months. Certain loans are secured – refer to note 37. Impairments Assets carried at amortised cost The Group assesses at each reporting date whether there is objective evidence that an asset or group of assets is impaired. Impairment provisions raised during the year are charged to profit or loss. AFRICAN DAWN ANNUAL REPORT 2016 47


AFRICAN DAWN Annual Report 2016
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