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Baker Technology LimitedAnnual Report 2014
2.
Summary of significant accountingpolicies (cont’d)
2.10
Financial instruments
(a)
Financial assets
Initial recognition andmeasurement
Financialassetsare recognisedwhen,andonlywhen, theGroupbecomesaparty to thecontractual
provisionsof thefinancial instrument.TheGroupdetermines theclassificationof itsfinancial assets
at initial recognition.
When financial assets are recognised initially, they aremeasured at fair value, plus, in the case of
financial assets not at fair value throughprofit or loss, directly attributable transaction costs.
Subsequentmeasurement
The subsequentmeasurement of financial assets depends on their classification as follows:
(i)
Financial assets at fair value throughprofit or loss
Financial assetsat fair value throughprofitor loss includefinancial assetsheld for trading.
Financial assets are classified as held for trading if they are acquired for the purpose
of selling or repurchasing in the near term. This category includes derivative financial
instruments entered into by the Group. Derivatives, including separated embedded
derivatives are also classified as held for trading.
The Group has not designated any financial assets upon initial recognition at fair value
throughprofit or loss.
Subsequent to initial recognition, financial assets at fair value through profit or loss are
measuredat fairvalue.Anygainsor lossesarising fromchanges in fairvalueof thefinancial
assets are recognised in profit or loss. Net gains or net losses on financial assets at fair
value throughprofit or loss includeexchangedifferences, interest anddividend income.
Derivatives embedded in host contracts are accounted for as separate derivatives and
recorded at fair value if their economic characteristics and risks are not closely related
to those of the host contracts and the host contracts are not measured at fair value
with changes in fair values recognised in profit or loss. These embedded derivatives are
measuredat fair valuewith changes in fair value recognised inprofit or loss. Reassessment
only occurs if there is a change in the terms of the contract that significantlymodifies the
cashflows thatwouldotherwisebe required.
NOTES TO THE
FINANCIAL STATEMENTS
For the financial year ended 31December 2014
