FINANCIALS 2018
3. Summary of Accounting Policies
(continued)
fair value through profit or loss if the financial asset
is held within a business model whose objective is
achieved by both collecting contractual cash flows
and selling the financial assets and the contractual
terms of the financial asset give rise on specified
dates to cash flows that are solely payments of
principal and interest on the principal amount
outstanding.
d) Goods and services tax (GST) (continued)
Cash flows are included in the cash flow statement
on a gross basis. The GST component of cash flows
arising from investing and financing activities which
is recoverable from, or payable to, the taxation
authority is classified as operating cash flows.
e) Financial Instruments
Financial assets and financial liabilities are recognised
in the Company’s Statement of Financial Position
when the Company becomes a party to the
contractual provisions of the instrument.
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By default, all other financial assets are measured
subsequently at fair value through profit or loss (FVTPL) .
Despite the foregoing, the Company may make
the following irrevocable election / designation at
initial recognition of a financial asset:
• The Company may irrevocably elect to present
subsequent changes in fair value of an equity
investment in other comprehensive income if
certain criteria are met; and
• The Company may irrevocably designate a debt
investment that meets the amortised cost or
FVTOCI criteria as measured at FVTPL if doing so
eliminates or significantly reduces an accounting
mismatch
Financial assets and financial liabilities are initially
measured at fair value. Transaction costs that are
directly attributable to the acquisition or issue
of financial assets and financial liabilities (other
than financial assets and financial liabilities at
fair value through profit or loss) are added to or
deducted from the fair value of the financial assets
or financial liabilities, as appropriate, on initial
recognition. Transaction costs directly attributable
to the acquisition of financial assets or financial
liabilities at fair value through profit or loss are
recognised immediately in profit or loss.
Amortised cost and effective interest method
The effective interest method is a method
of calculating the amortised cost of a debt
instrument and of allocating interest income over
the relevant period. Interest income is recognised
in profit or loss and is included in the “finance
income - interest income” line item.
Financial assets - Initial recognition and
measurement
At initial recognition, financial assets are classified
and measured at fair value. Financial assets are
subsequently measured in their entirety at either
amortised cost or fair value, depending on the
classification of the financial assets.
The amortised cost of a financial asset is the
amount at which the financial asset is measured at
initial recognition minus the principal repayments,
plus the cumulative amortisation using the
effective interest method of any difference
between that initial amount and the maturity
amount, adjusted for any loss allowance. The
gross carrying amount of a financial asset is the
amortised cost of a financial asset before adjusting
for any loss allowance.
The classification of the financial assets at initial
recognition depends on the financial asset’s
contractual cash flow characteristics.
Financial assets subsequently measured at
amortised cost
Debt instruments are measured subsequently at
amortised cost when the financial asset is held
within a business model whose objective is to
hold financial assets in order to collect contractual
cash flows and the contractual terms give rise to
on specified dates to cash flows that are solely
payments of principal and interest on the principal
amount outstanding (SPPI).
Trade and other receivables
Trade and other receivables are initially recognised at
fair value and subsequently measured at amortised
cost using the effective interest method, less any
allowance for expected credit losses. Trade receivables
are generally due for settlement within 30 days.
Financial assets designated at fair value through
other comprehensive income (FVTOCI)
Debt instruments are subsequently measured at
Derecognition of Financial Assets
The Company derecognises a financial asset when
the contractual rights to the cash flows from the
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