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ASIA MEDIA GROUP Berhad
Annual Report 2016
84
Notes to the Financial Statements
(continued)
3.
Summary of significant accounting policies (cont’d)
3.6 Financial assets (cont’d)
(iv) Reclassification of financial assets
The Group and the Company may choose to reclassify non-derivative assets out of
the financial assets at FVTPL category, in rare circumstances, where the financial
assets are no longer held for the purpose of selling or repurchasing in the short term.
In addition, the Group and the Company may also choose to reclassify financial assets
that would meet the definition of loans and receivables out of the financial assets
at FVTPL or AFS financial assets if the Group and the Company have the intention
and ability to hold the financial assets for the foreseeable future or until maturity.
Reclassifications are made at fair value as at the reclassification date, whereby the
fair value becomes the new cost or amortised cost, as applicable.
For a financial asset reclassified out of the AFS financial assets, any previous gain
or loss on that asset that has been recognised in equity is amortised to the profit
or loss over the remaining life of the asset using the effective interest method. Any
difference between the new amortised cost and the expected cash flows is also
amortised over the remaining life of the asset using the effective interest method. If
the asset is subsequently determined to be impaired, then the amount recorded in
equity is recycled to the profit or loss.
Reclassification is at the election of management, and is determined on an instrument-
by-instrument basis. The Group and the Company do not reclassify any financial
instrument into the FVTPL category after initial recognition.
3.7 Cash and cash equivalents
For the purpose of the statements of cash flows, cash and cash equivalents comprise cash
at bank and on hand and demand deposits, net of bank overdrafts and pledged deposits.
3.8 Provisions for liabilities
Provisions for liabilities are recognised when the Group or the Company has a present
obligation (legal or constructive) as a result of a past event, it is probable that an outflow
of economic resources will be required to settle the obligation and the amount of the
obligation can be estimated reliably.
Provisions are reviewed at each reporting date and adjusted to reflect the current best
estimate. If it is no longer probable that an outflow of economic resources will be required
to settle the obligation, the provision is reversed. If the effect of the time value of money
is material, provisions are discounted using a current pre-tax rate that reflects, where
appropriate, the risks specific to the liability. When discounting is used, the increase in the
provision due to the passage of time is recognised as a finance cost.