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FINANCIAL STATEMENTS
Axiata Group Berhad | Annual Report 2016
139
3.
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(f) Financial assets
(i) Classification
The Group and the Company classify its financial assets in the following categories: at FVTPL, loans and receivables, available-for-
sale (“AFS”) and held-to-maturity (“HTM”). The classification depends on the purpose for which the financial assets were acquired.
Management determines the classification at initial recognition.
(a) Financial assets at FVTPL
The Group classifies financial assets at FVTPL if they are acquired principally for the purpose of selling in the short term, i.e. are
held for trading. Derivatives are also categorised as held for trading unless they are designated as hedges. See Note 19 to the
financial statements on derivative financial instruments and hedging activities.
The assets are presented as current assets if they are expected to be sold within twelve (12) months after the end of the reporting
period; otherwise they are presented as non-current assets.
(b) Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active
market. If collection of the amounts is expected in one year or less they are classified as current assets. If not, they are presented
as non-current assets.
(c) AFS financial assets
AFS financial assets are non-derivatives that are either designated in this category or not classified in any of the other categories.
They are included in non-current assets unless the investment matures or management intends to dispose of it within twelve (12)
months from the end of the reporting period.
(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 OCI, 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 OCI as part of fair value change.