Asia Media Annual Report 2017

ASIA MEDIA GROUP BERHAD Annual Report 2017 88 3. Significant Accounting Policies (cont’d) (h) Financial liabilities (cont’d) The Group and the Company classify their financial liabilities at initial recognition, into the following categories: (i) Other financial liabilities measured at amortised cost The Group’s and the Company’s other financial liabilities comprise trade and other payables, amount due to Directors, amount due to a subsidiary company and loans and borrowings. Trade and other payables, amount due to Directors and amount due to a subsidiary company are recognised initially at fair value plus directly attributable transaction costs and subsequently measured at amortised cost using the effective interest method. Loans and borrowings are recognised initially at fair value, net of transaction costs incurred, and subsequently measured at amortised cost using the effective interest method. Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date. Gains and losses on financial liabilities measured at amortised cost are recognised in profit or loss when the liabilities are derecognised, and through the amortisation process. (ii) Financial guarantee contracts A financial guarantee contract is a contract that requires the issuer to make specific payment to reimburse the holder for a loss it incurs because a specific debtor fails to make payment when due in accordance with the original or modified terms of a debt instrument. Financial guarantee contracts are recognised initially as a liability at fair value, adjusted for transaction costs that are directly attributable to the issuance of the guarantee. Subsequently, the liability is measured at the higher of the best estimate of the expenditure required to settle the present obligation at the reporting date and the amount recognised less cumulative amortisation. NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2017 (cont’d)