4) SIGNIFICANT ACCOUNTING POLICIES
(Cont’d)
j)
Financial Instruments
(Cont’d)
ii) Financial instrument categories and subsequent measurement
(Cont’d)
Financial liabilities
(Cont’d)
a) Financial liabilities at fair value through profit or loss (Cont’d)
Financial liabilities at fair value through profit or loss are stated at fair value,
with any gains or losses arising on remeasurement recognised in profit or loss.
The net gain or loss recognised in profit or loss incorporates any interest paid
on the financial liability and is included in the ’other gains and losses’ line item
in the statements of comprehensive income.
b) Other financial liabilities
Other financial liabilities, including borrowings, are initially measured at fair
value, net of transaction costs and are subsequently measured at amortised
cost using the effective interest method, with interest expense recognised on
an effective yield basis.
The effective interest method is a method of calculating the amortised cost of
a financial liability and of allocating interest expense over the relevant period.
The effective interest rate is the rate that exactly discounts estimated future
cash payments through the expected life of the financial liability, or (where
appropriate) a shorter period, to the net carrying amount on initial recognition.
The Group derecognises financial liabilities when, and only when, the Group’s
obligations are discharged, cancelled or they expire. The difference between the
carrying amount of the financial liability derecognised and the consideration paid or
payable is recognised in profit or loss.
iii) Impairment of Financial Assets
The Group assesses at each reporting date whether there is objective evidence
that a financial asset or a group of financial assets is impaired. In the case of equity
securities classified as available-for-sale, a significant or prolonged decline in the
fair value of the security below its cost is taken as evidence that the securities are
impaired. If any such evidence exists for available-for-sale financial assets, the
cumulative loss - measured as the difference between the acquisition cost and the
current fair value, less impairment loss on that financial asset previously recognised
in profit or loss - is removed from equity and recognised in profit or loss. Impairment
losses recognised in profit or loss on equity instruments are not reversed through
profit or loss.
Asia Media Group Berhad Annual Report 2014
95
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)
