Integrated Reports Senwes Financial Review 2018 - Page 67

FINANCIAL REVIEW 2.10.1.1 Loans and receivables Loans and receivables are non-derivative financial assets with fixed or deter- minable payments that are not quoted in an active market. They are included in current assets, except for maturities greater than twelve months after the reporting date. These are classified as non-current assets. Loans and re- ceivables are classified as trade and other receivables in the statement of financial position. Loans and receivables are recognised initially at fair value plus transaction costs. The subsequent measurement is at amortised cost less impairment, using the effective interest rate method. Interest income determined by using the effective interest rate method is included in finance income in profit or loss. 2.10.1.2 Available-for-sale financial investments Available-for-sale financial assets include equity investments and debt secu- rities and are non-derivative financial assets that are classified as available- for-sale or are not classified in any of the other categories. Available-for-sale financial assets are initially recognised at fair value plus transaction costs. Transaction costs are incremental costs, directly attribu­- table to the purchase of the financial asset; in other words costs which would not have been incurred should the asset not have been purchased. After initial measurement, available-for-sale financial assets are measured at fair value with unrealised gains or losses recognised directly in other com- prehensive income, until the investment is derecognised or determined to be impaired at which time the cumulative gain or loss previously recorded in other comprehensive income is recognised in profit or loss. When the group has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, it continues to recognise the transferred asset to the extent of the group’s continuing involvement. In that case, the group also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the group has retained. 2.10.2 FINANCIAL LIABILITIES Financial liabilities within the scope of IAS 39 are classified as loans and borrowings, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. The group determines the classification of its financial liabilities at initial recognition. 2.10.2.1 Interest-bearing loans and borrowings All loans and borrowings are initially recognised at the fair value of the con- sideration received, including directly attributable transaction costs. After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the effective interest rate method. Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as through the EIR amortisation process. Interest expense deter- mined by using the effective interest rate method is included in finance cost in profit or loss. Derecognition 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 or modification is treated as the derecognition of the original liability and the recognition of a new liability FRFffW&V6RFR&W7V7FfP6''rVG22&V6v6VB&fB"72ࠐfg6WGFpvW&RVv&vBF6WBfb76WG2BƖ&ƗFW2W7G2BvW&RB0FVFVBF6WGFRFR&VWfB76WG2BƖ&ƗFW26VFVW6ǒ"WB&62FRVG2&R6WBfbࠐf67G'VVG2Fv6FRw&W2'G&RF666VBFR#d4$UdUpFW&V6vFࠐf676WG2&RFW&V6v6VBvV㠠FR&vBF&V6VfR66frg&fW7FVG2W&W3 FRw&W2G&6fW'&VBG2&vG2F&V6VfR66fw2g&FR76WB 277VVB&ƖvFFFR&V6VfVB66fw2gVvFW@FW&FVFF&B'GVFW"( 72F&Vv( '&vVVC@VFW#FRw&W2G&6fW'&VB7V'7FFǒFR&62B&Wv&G2bFP76WC "FRw&W2VFW"G&6fW'&VB"&WFVB7V'7FFǒFR&60B&Wv&G2bFR76WB'WB2G&6fW'&VB6G&bFR76WBࠐc