- 9 - Subsequent measurement of financial assets depends on the Group’s business model for managing the financial asset and the cash flow characteristics of the financial assets. There are three measurement categories into which the Group classifies its financial assets: - Amortised cost - A financial asset will be measured 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. In addition, 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. Interest income from these financial assets is using the effective interest rate method. Any gain or loss arising on derecognition and reclassification are recognised directly in profit or loss and impairment losses are presented in profit or loss. - Fair value through other comprehensive income (FVTOCI) - A financial asset will be measured at FVTOCI when it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets. In addition, 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. Movements in the carrying amount are taken through other comprehensive income, except for the recognition of impairment losses and interest income using effective interest rate method. When the financial asset is derecognised, the cumulative gain or loss previously recognised in other comprehensive income is reclassified to profit or loss or retained earnings. - Fair value through profit or loss (FVTPL) - A financial asset that does not meet the criteria for amortised cost or FVTOCI are measured at FVTPL. Impairment The Group assesses on a forward-looking basis the expected credit loss associated with its financial assets carried at amortised cost and investments in debt instruments that are measured at FVTOCI. The Group applies general or simplified approach for credit-impaired consideration which depends on the significant of credit risk. In determining allowance of expected credit loss, the financial asset is considered to have low credit risk and no significant incremental of credit risk since initial recognition. The Group will not recognize any allowance of expected credit loss. Reversals of impairment An impairment loss in respect of a financial asset is reversed if the subsequent increase in recoverable amount can be related objectively to an event occurring after the impairment loss was recognised in profit or loss. Derecognition of financial assets The Group derecognizes a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. On derecognition of a financial asset measured at amortized cost, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognized in profit or loss. In addition, on derecognition of an investment in a debt instrument classified as at FVTOCI, the cumulative gain or loss previously accumulated in the investments revaluation reserve is reclassified to profit or loss. In contrast, on derecognition of an investment in equity instrument which the Group has elected on initial recognition to measure at FVTOCI, the cumulative gain or loss previously accumulated in the investments revaluation reserve is not reclassified to profit or loss, but is transferred to retained earnings. 241 BUSINESS OPERATION AND PERFORMANCE CORPORATE GOVERNANCE FINANCIAL REPORTS AND FINANCIAL STATEMENTS APPENDIX
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