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HG METAL MANUFACTURING LIMITED
ANNUAL REPORT 2014
NOTES TO THE
FINANCIAL STATEMENTS
for the financial year ended 31 December 2014
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
2.12 Financial Instruments (cont’d)
(a)
Financial assets (cont’d)
Subsequent measurement (cont’d)
(i)
Financial assets at fair value through profit or loss (cont’d)
The Group has not designated any financial assets upon initial recognition at fair
value through profit or loss.
Subsequent to initial recognition, financial assets at fair value through profit or loss are
measured at fair value. Any gains or losses arising from changes in fair value of the
financial assets are recognised in profit or loss. Net gains or net losses on financial
assets at fair value through profit or loss include exchange differences, interest and
dividend income.
(ii)
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 profit
or loss when the loans and receivables are derecognised or impaired, and through
the amortisation process.
(iii)
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 subsequently 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.
