2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.12 Financial instruments (continued)
(a)
Financial assets (continued)
Subsequent measurement
The subsequent measurement of financial assets depends on their classification as follows:
(i)
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss include financial assets held for
trading. Financial assets are classified as held for trading if they are acquired for the
purpose of selling or repurchasing in the near term. This category includes derivative
financial instruments entered into by the Group that are not designated as hedging
instruments in hedge relationships as defined by FRS 39. Derivatives, including
separated embedded derivatives are also classified as held for trading unless they are
designated as effective hedging instruments.
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.
63
HG METAL MANUFACTURING LIMITED
ANNUAL REPORT 2015
NOTES TO THE
FINANCIAL STATEMENTS
For the financial year ended 31 December 2015
