BAKERTECHNOLOGYLIMITED
ANNUALREPORT2013
92
Notes to the
Financial Statements
for the financial year ended 31December 2013
2.
Summaryof significantaccounting policies (cont’d)
2.10
Financial instruments (cont’d)
(b)
Financial liabilities (cont’d)
Subsequentmeasurement
Themeasurement of financial liabilities depends on their classification as follows:
(i)
Financial liabilities at fair value throughprofit or loss
Financial liabilities at fair value throughprofit or loss include financial liabilities held for trading. Financial liabilities
are classified as held for trading if they are acquired for the purpose of selling in the near term. This category
includes derivativefinancial instruments entered intoby theGroup that arenot designatedas hedging instruments
in hedge relationships. Separated embedded derivatives are also classified as held for trading unless they are
designated as effective hedging instruments.
Subsequent to initial recognition, financial liabilities at fair value through profit or loss aremeasured at fair value.
Any gains or losses arising from changes in fair value of the financial liabilities are recognised in profit or loss.
TheGroup has not designated any financial liabilities upon initial recognition at fair value through profit or loss.
(ii)
Financial liabilities at amortised cost
After initial recognition, financial liabilities that are not carried at fair value throughprofit or loss are subsequently
measured at amortised cost using the effective interest method. Gains and losses are recognised in profit or loss
when the liabilities are derecognised, and through the amortisationprocess.
De-recognition
Afinancial liability is derecognisedwhen theobligationunder the liability is dischargedor cancelledor expires.When an
existingfinancial liability is replacedby another from the same lender on substantially different terms, or the terms of an
existing liability are substantiallymodified, such an exchangeormodification is treated as aderecognitionof theoriginal
liability and the recognitionof anew liability, and thedifference in the respective carryingamounts is recognised inprofit
or loss.
(c)
Offsettingof financial instruments
Financial assets and financial liabilities are offset and the net amount is presented in the balance sheets, when and only
when, there is a currently enforceable legal right to set off the recognised amounts and there is an intention to settleon
a net basis, or to realise the assets and settle the liabilities simultaneously.
