Baker Technology LimitedAnnual Report 2014
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2.
Summaryof significant accountingpolicies (cont’d)
2.10
Financial instruments (cont’d)
(b)
Financial liabilities (cont’d)
Subsequentmeasurement (cont’d)
(ii)
Financial liabilities at amortised cost
After initial recognition, financial liabilities that are not carried at fair value through profit
or loss are subsequentlymeasured at amortised cost using theeffective interestmethod.
Gains and losses are recognised inprofit or losswhen the liabilities arederecognised, and
through theamortisationprocess.
De-recognition
Afinancial liability isderecognisedwhen theobligationunder the liability isdischargedor cancelled
or expires. When an existing financial liability is replaced by another from the same lender on
substantially different terms, or the terms of an existing liability are substantiallymodified, such an
exchangeormodification is treatedasaderecognitionof theoriginal liabilityand the recognitionof
anew liability, and thedifference in the respective carryingamounts is recognised inprofit or loss.
2.11
Impairment of financial assets
TheGroup assesses at each reportingdatewhether 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 thatarenot individuallysignificant. If theGroupdetermines thatnoobjectiveevidence
of impairment exists for an individually assessedfinancial asset, whether significant or not, it includes
the asset in agroupof financial assetswith similar credit risk characteristics and collectively assesses
them for impairment.Assets thatare individuallyassessed for impairmentand forwhichan impairment
loss is, or continues tobe recognisedarenot included inacollectiveassessmentof impairment.
If there is objective evidence that an impairment loss on financial assets carried at amortised cost
hasbeen incurred, theamountof the loss ismeasuredas thedifferencebetween theasset’scarrying
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, thediscount rate formeasuring
any impairment loss is thecurrenteffective interest rate.Thecarryingamountof theasset is reduced
through theuseof anallowanceaccount. The impairment loss is recognised in theprofit or loss.
NOTES TO THE
FINANCIAL STATEMENTS
For the financial year ended 31December 2014
