Notestothefinancialstatements
For the financial year ended31December 2015
2.
Summaryof significant accountingpolicies (cont’d)
2.9
Financial instruments
(a)
Financial assets
Initial recognitionandmeasurement
Financial assets are recognised when, and only when, the Group becomes a party to the contractual provisions of the financial instrument. The Group
determines the classificationof its financial assetsat initial recognition.
When financial assets are recognised initially, they aremeasuredat fair value, plus, in the caseof financial assetsnot at fair value throughprofit or loss,
directly attributable transaction costs.
Subsequentmeasurement
The subsequentmeasurement of financial assetsdependson their classificationas follows:
(i)
Loansand receivables
Non-derivative financial assetswith fixedordeterminablepayments that arenot quoted inanactivemarket areclassifiedas loansand receivables.
Subsequent to initial recognition, loansand receivablesaremeasuredat amortisedcostusing theeffective interestmethod, less impairment.Gains
and lossesare recognised inprofit or losswhen the loansand receivablesarederecognisedor impaired, and through theamortisationprocess.
(ii)
Available-for-sale financial assets
Available-for-sale financialassets includeequityanddebtsecurities.Equity investmentsclassifiedasavailable-for-saleare those,whichareneither
classifiedasheld for tradingnor designatedat fair value throughprofit or loss. Debt securities in this category are thosewhichare intended tobe
held for an indefiniteperiodof timeandwhichmay be sold in response toneeds 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
onmonetary instruments and interest calculated using the effective interestmethod are recognised in profit or loss. The cumulative gain or loss
previously recognised inothercomprehensive income is reclassified fromequity toprofit or lossasa reclassificationadjustmentwhen the financial
asset isderecognised.
Investments inequity instrumentswhose fair value cannot be reliablymeasuredaremeasuredat cost less impairment loss.
2.
Summaryof significant accountingpolicies (cont’d)
2.9
Financial instruments (cont’d)
(a)
Financial assets (cont’d)
De-recognition
A financial asset isderecognisedwhere the contractual right to receive cash flows from theasset hasexpired. Onderecognitionof a financial asset in its
entirety, thedifferencebetween thecarryingamount and thesumof theconsideration receivedandany cumulativegainor loss that hadbeen recognised
inother comprehensive income is recognised inprofit or loss.
(b)
Financial liabilities
Initial recognitionandmeasurement
Financial liabilities are recognisedwhen, and onlywhen, theGroupbecomes aparty to the contractual provisions of the financial instrument. TheGroup
determines the classificationof its financial liabilitiesat initial recognition.
All financial liabilitiesarerecognised initiallyat fairvalue, plus, in thecaseof financial liabilitiesnotat fairvalue throughprofitor loss, directlyattributable
transaction costs.
Subsequentmeasurement
After initial recognition, financial liabilities that arenot carriedat fair value throughprofit or lossaresubsequentlymeasuredat amortisedcost using the
effective interestmethod. Gainsand lossesare recognised inprofit or losswhen the liabilitiesarederecognised, and through theamortisationprocess.
De-recognition
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expired. 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 substantially modified, such an
exchange ormodification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective
carryingamounts is recognised inprofit or loss.
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BAKERTECHNOLOGYlimited
ANNUAL REPORT 2015
