2. Significant accounting policies
(continued)
b) Financial instruments
(continued)
(ii) Financial instrument categories and subsequent measurement
(continued)
(d) Available-for-sale financial assets
Available-for-sale category comprises investment in equity and debt securities
instruments that are not held for trading.
Investments in equity instruments that do not have a quoted market price in an active
market and whose fair value cannot be reliably measured are measured at cost.
Other financial assets categorised as available-for-sale are subsequently measured
at their fair values with the gain or loss recognised in other comprehensive income,
except for impairment losses, foreign exchange gains and losses arising from
monetary items and gains and losses of hedged items attributable to hedge risks of
fair value hedges which are recognised in profit or loss. On derecognition, the
cumulative gain or loss recognised in other comprehensive income is reclassified
from equity into profit or loss. Interest calculated for a debt instrument using the
effective interest method is recognised in profit or loss.
All financial assets, except for those measured at fair value through profit or loss,
are subject to review for impairment [see Note 2(i)(i)].
Financial liabilities
All financial liabilities, other than those categorised as fair value through profit or loss,
are subsequently measured at amortised cost.
Fair value through profit or loss category comprises financial liabilities that are derivatives
(except for a derivative that is a financial guarantee contract or a designated and
effective hedging instrument) or financial liabilities that are specifically designated into
this category upon initial recognition.
Derivatives that are linked to and must be settled by delivery of equity instruments that do
not have a quoted price in an active market for identical instruments whose fair values
cannot be reliably measured are measured at cost.
Other financial liabilities 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.
(iii) Financial guarantee contracts
A financial guarantee contract is a contract that requires the issuer to make specified
payments to reimburse the holder for a loss it incurs because a specified debtor fails to
make payment when due in accordance with the original or modified terms of a debt
instrument.
Fair value arising from financial guarantee contracts are classified as deferred income and
are amortised to profit or loss using a straight-line method over the contractual period or,
when there is no specified contractual period, recognised in profit or loss upon discharge
of the guarantee. When settlement of a financial guarantee contract becomes probable,
an estimate of the obligation is made. If the carrying value of the financial guarantee contract
is lower than the obligation, the carrying value is adjusted to the obligation amount and
accounted for as a provision.
Notes to the Financial Statements
SARAWAK PLANTATION BERHAD
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Annual Report 2014
