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AFRICAN DAWN 2015 Annual Report

Accounting Policies continued 1.17 Financial instruments (continued) AFRICAN DAWN 53 ANNUAL REPORT 2015 Financial liabilities A financial liability (or group of financial liabilities) or a part of a financial liability (or part of a group of financial liabilities) is derecognised when and only when the liability is extinguished, i.e. when the obligation specified in the contract is discharged, cancelled or expires. The difference between the carrying amount of a financial asset or financial liability (or part thereof) that is derecognised and the consideration paid or received, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss for the period. 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 Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market, other than: • Those that the Group intends to sell immediately or in the short term, which are categorised as held for trading, and those that the entity upon initial recognition designates as at fair value through profit or loss; • Those that the Group upon initial recognition designates as available-for-sale; or • Those for which the holder may not recover substantially all of its initial investment, other than because of credit deterioration. They arise when the Group provides money, goods or services directly to a debtor with no intention of trading the advance. The following are classified as loans and receivable when they have fixed or determinable payments or when payments have been estimated because the contractual repayment terms have not been agreed upon: • Other financial assets • Properties in possession • Loans to group companies • Trade receivables • Other receivables • Cash and cash equivalents


AFRICAN DAWN 2015 Annual Report
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