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BAKER TECHNOLOGY LIMITED ANNUAL REPORT 2012
BAKER TECHNOLOGY LIMITED ANNUAL REPORT 2012
2. Summaryof significant accounting policies (cont’d)
2.11 Financial assets (cont’d)
Subsequent measurement (cont’d)
(b)
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
aremeasured 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.
(c)
Held-to-maturity investments
Non-derivative financial assets with fixed or determinable payments and fixed maturity are classified as
held-to-maturity when the Group has the positive intention and ability to hold the investment to maturity.
Subsequent to initial recognition, held-to-maturity investments are measured at amortised cost using the
effective interest method, less impairment.Gains and losses are recognised inprofit or losswhen the held-
to-maturity investments are derecognised or impaired, and through the amortisation process.
(d)
Available-for-sale financial assets
Available-for-sale financial assets include equity and debt securities. Equity investments classified as
available-for-sale are those, which are neither classified as held for trading nor designated at fair value
through profit or loss. Debt securities in this category are those which are intended to be held for an
indefinite period of time and which may be sold in response to needs for liquidity or in response to
changes in themarket conditions.
After initial recognition, available-for-sale financial assets are subsequently measured at fair value. Any
gains or losses from changes in fair value of the financial asset are recognised in other comprehensive
income, except that impairment losses, foreign exchange gains and losses on monetary instruments and
interest calculated using the effective interest method are recognised in profit or loss. The cumulative gain
or loss previously recognised in other comprehensive income is reclassified from equity to profit or loss as
a reclassification adjustment when the financial asset is derecognised.
Investments in equity instruments whose fair value cannot be reliably measured aremeasured at cost less
impairment loss.
2. Summaryof significant accounting policies (cont’d)
2.11 Financial assets (cont’d)
De-recognition
A financial asset is derecognisedwhere the contractual right to receive cash flows from the asset has expired.
On derecognition of a financial asset in its entirety, the difference between the carrying amount and the sum of
the consideration received and any cumulative gain or loss that had been recognised in other comprehensive
income is recognised in profit or loss.
Regularway purchase or sale of a financial assets
All regular way purchases and sales of financial assets are recognised or derecognised on the trade date i.e.,
the date that theGroup commits to purchase or sell the asset. Regular way purchases or sales are purchases or
sales of financial assets that require delivery of assets within the period generally established by regulation or
convention in themarketplace concerned.
2.12 Impairment of financial assets
The Group assesses at each reporting date whether there is any objective evidence that a financial asset is
impaired.
(a)
Financial assets carried at amortised cost
For financial assets carried at amortised cost, the Group first assesses whether objective evidence of
impairment exists individually for financial assets that are individually significant, or collectively for
financial assets that are not individually significant. If theGroup determines that no objective evidence of
impairment exists for an individually assessed financial asset, whether significant or not, it includes the
asset inagroupof financial assetswith similar credit risk characteristics and collectively assesses them for
impairment. Assets that are individually assessed for impairment and for which an impairment loss is, or
continues to be recognised are not included in a collective assessment of impairment.
If there is objective evidence that an impairment loss on financial assets carried at amortised cost has
been incurred, the amount of the loss is measured as the difference between the asset’s carrying amount
and the present value of estimated future cash flows discounted at the financial asset’s original effective
interest rate. If a loan has a variable interest rate, the discount rate for measuring any impairment loss
is the current effective interest rate. The carrying amount of the asset is reduced through the use of an
allowance account. The amount of the loss is recognised in the profit or loss.
When theasset becomes uncollectible, the carryingamount of impairedfinancial assets is reduceddirectly
or if anamount was charged to theallowanceaccount, theamounts charged to theallowanceaccount are
written off against the carrying value of the financial asset.
for the financial year ended 31december 2012
for the financial year ended 31december 2012
notestothe
financialstatements
notestothe
financialstatements
