axiata group berhad | annual report 2015
138
NOTES TO THE
FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2015
3.
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(h) Derivative financial instruments and hedging activities (continued)
(ii) Cash flow hedge (continued)
When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or
loss existing in equity at that time remains in equity and is recognised when the forecast transaction is ultimately recognised in the profit
or loss. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported in equity is immediately
transferred to the profit or loss within ‘other gains/(losses) - net’.
(iii) Net investment hedge
Hedges of net investments in foreign operations are accounted for similarly to cash flow hedges.
Any gain or loss on the hedging instrument relating to the effective portion of the hedge is recognised in other comprehensive income. The
gain or loss relating to the ineffective portion is recognised immediately in the profit or loss within ‘other gains/(losses) - net’.
Gains and losses accumulated in equity are included in the profit or loss when the foreign operation is partially disposed of or sold.
(i) Inventories
Inventories are stated at lower of cost and net realisable value.
Certain items such as spare parts, stand-by equipment and servicing equipment shall be recognised as PPE when they meet the definition of PPE
under MFRS 116. Otherwise, the items are classified as inventory.
Cost is determined on a weighted average basis and comprises all cost of purchase and other cost incurred in bringing the inventories to their
present location.
Net realisable value represents the estimated selling price in the ordinary course of business, less all estimated costs to completion and applicable
variable selling expenses. In arriving at the net realisable value, due allowance is made for all obsolete and slow moving items.
(j) Trade receivables
Trade receivables are amounts due from customers for goods sold or services performed in the ordinary course of business. If collection is expected
in one (1) year or less (or in the normal operating cycle of the business if longer), they are classified as current assets. Otherwise, they are presented
as non-current assets.
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less
accumulated impairment losses.
(k) Cash and cash equivalents
For the purpose of the statements of cash flows, cash and cash equivalents comprise cash on hand, deposits held at call with banks, other short
term, highly liquid investments with original maturities of three (3) months or less and bank overdrafts. Deposits held as pledged securities for
term loans granted are not included as cash and cash equivalents.
Bank overdrafts are included within borrowings in current liabilities in the statements of financial position.
(l) Trade payables
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts
payable are classified as current liabilities if payment is due within one (1) year or less (or in the normal operating cycle of the business if longer).
If not, they are presented as non-current liabilities.
Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.
