axiata group berhad | annual report 2015
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3.
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(f) Financial assets (continued)
(i) Classification (continued)
(d) HTM financial assets
HTM financial assets are non-derivative financial assets with fixed or determinable payments and fixed maturities that the Group’s
and Company’s management have the positive intention and ability to hold to maturity. If the Group and the Company were to
sell other than an insignificant amount of HTM financial assets, the whole category would be tainted and reclassified as AFS. HTM
financial assets are included in non-current assets, except for those with maturities less than twelve (12) months from the end of the
reporting period, which are classified as current assets.
(ii) Recognition and initial measurement
Regular purchases and sales of financial assets are recognised on the trade-date, the date on which the Group and the Company commit
to purchase or sell the asset.
Financial assets are initially recognised at fair value plus transaction costs for all financial assets not carried at FVTPL. Financial assets
carried at FVTPL are initially recognised at fair value and transaction costs are expensed in profit or loss.
(iii) Subsequent measurement – gains and losses
AFS financial assets and financial assets at FVTPL are subsequently carried at fair value. Loans and receivables and HTM financial assets
are subsequently carried at amortised cost using the effective interest method.
Changes in the fair values of financial assets at FVTPL, including the effects of currency translation are recognised in profit or loss in the
period in which the changes arise.
Changes in the fair value of AFS financial assets are recognised in other comprehensive income, except for impairment losses (see
accounting policy Note 3(f)(iv)(b)) and foreign exchange gains and losses on monetary assets. The exchange differences on monetary
assets are recognised in profit or loss, whereas exchange differences on non-monetary assets are recognised in other comprehensive
income as part of fair value change.
(iv) Subsequent measurement - Impairment of financial assets
(a) Assets carried at amortised cost
The Group and the Company assess at the end of the reporting period whether there is objective evidence that a financial asset or
group of financial assets is impaired. A financial asset or a group of financial assets is impaired and impairment losses are incurred
only if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the
asset (a ‘loss event’) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group
of financial assets that can be reliably estimated.
The criteria that the Group and the Company use to determine that there is objective evidence of an impairment loss include:
•
Significant financial difficulty of the issuer or obligor;
•
A breach of contract, such as a default or delinquency in interest or principal payments;
•
The Group, for economic or legal reasons relating to the borrower’s financial difficulty, granting to the borrower a concession
that the lender would not otherwise consider;
•
It becomes probable that the borrower will enter bankruptcy or other financial reorganisation;
