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Notes to the
financial statements
For the financial year ended 31 December 2018
86
B A K E R T E C H N O L O G Y
L I M I T E D
2.
Summary of significant accounting policies (cont’d)
2.13
Financial instruments (cont’d)
(a)
Financial assets (cont’d)
(iii)
Fair value through profit or loss
Assets that do not meet the criteria for amortised cost or FVOCI are measured at fair
value through profit or loss. A gain or loss on a debt instruments that is subsequently
measured at fair value through profit or loss and is not part of a hedging relationship
is recognised in profit or loss in the period in which it arises.
Investments in equity instruments
On initial recognition of an investment in equity instrument that is not held for trading,
the Group may irrevocably elect to present subsequent changes in fair value in other
comprehensive income (“OCI”). Dividends from such investments are to be recognised in
profit or loss when the Group’s right to receive payments is established. For investments in
equity instruments which the Group has not elected to present subsequent changes in fair
value in OCI, changes in fair value are recognised in profit or loss.
Derivatives
Derivatives are initially recognised at fair value on the date a derivative contract is entered
into and are subsequently remeasured to their fair value at the end of each reporting period.
Changes in fair value of derivatives are recognised in profit or loss.
Derecognition
A financial asset is derecognised where 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 for debt instruments
is recognised in profit or loss.