2. Significant accounting policies
(continued)
(b) Financial instruments
(i) Initial recognition and measurement
A financial asset or a financial liability is recognised in the statements of financial position
when, and only when, the Group or the Company becomes a party to the contractual
provisions of the instrument.
A financial instrument is recognised initially at its fair value plus, in the case of a financial
instrument not at fair value through profit or loss, transaction costs that are directly
attributable to the acquisition or issue of the financial instrument.
An embedded derivative is recognised separately from the host contract and accounted
for as a derivative if, and only if, it is not closely related to the economic characteristics
and risks of the host contract and the host contract is not categorised at fair value
through profit or loss. The host contract, in the event an embedded derivative is recognised
separately, is accounted for in accordance with the policy applicable to the nature of the
host contract.
(ii) Financial instrument categories and subsequent measurement
The Group and the Company categorise financial instruments as follows:
Financial assets
(a) Financial assets at fair value through profit or loss
Fair value through profit or loss category comprises financial assets that are held for
trading, including derivatives (except for a derivative that is a financial guarantee
contract or a designated and effective hedging instrument) or financial assets that are
specifically designated into this category upon initial recognition.
Derivatives that are linked to and must be settled by delivery of unquoted equity
instruments whose fair values cannot be reliably measured are measured at cost.
Other financial assets categorised as fair value through profit or loss are subsequently
measured at their fair values with the gain or loss recognised in profit or loss.
(b) Held-to-maturity investments
Held-to-maturity investments category comprises debt instruments that are quoted
in an active market and the Group or the Company has the positive intention and
ability to hold them to maturity.
Financial assets categorised as held-to-maturity investments are subsequently
measured at amortised cost using the effective interest method.
(c) Loans and receivables
Loans and receivables category comprises debt instruments that are not quoted in
an active market.
Financial assets categorised as loans and receivables are subsequently measured
at amortised cost using the effective interest method.
Notes to the Financial Statements
SARAWAK PLANTATION BERHAD
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Annual Report 2014
