2. Summary of significant accounting policies (cont’d)
2.14 Financial instruments (cont’d)
(b) Financial liabilities
Initial recognition and measurement
Financial liabilities are recognised when, and only when, the Group becomes a party
to the contractual provisions of the financial instrument. The Group determines the
classification of its financial liabilities at initial recognition.
All financial liabilities are recognised initially at fair value plus in the case of financial
liabilities not at fair value through profit or loss, directly attributable transaction costs.
Subsequent measurement
The measurement of financial liabilities depends on their classification as follows:
(i)
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial
liabilities held for trading. Financial liabilities are classified as held for trading
if they are acquired for the purpose of selling in the near term. This category
includes derivative financial instruments entered into by the Group that are
not designated as hedging instruments in hedge relationships. Separated
embedded derivatives are also classified as held for trading unless they are
designated as effective hedging instruments.
Subsequent to initial recognition, financial liabilities at fair value through profit
or loss are measured at fair value. Any gains or losses arising from changes in
fair value of the financial liabilities are recognised in profit or loss.
The Group has not designated any financial liabilities upon initial recognition
at fair value through profit or loss.
(ii) Financial liabilities at amortised cost
After initial recognition, financial liabilities that are not carried at fair value
through profit or loss 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, and through the amortisation process.
Derecognition
A financial liability is derecognisedwhen the obligation under the liability is discharged
or 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 substantially modified, such an exchange or modification is treated as a
derecognition of the original liability and the recognition of a new liability, and the
difference in the respective carrying amounts is recognised in profit or loss.
NOTES TO THE FINANCIAL
STATEMENTS
For the financial year ended 30 June 2015
ASL Marine Holdings Ltd. /Annual Report 2015
88
