INDOFOOD AGRI RESOURCES LTD
ANNUAL REPORT 2015
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For the financial year ended 31 December 2015
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
2.15 Financial instruments (cont’d)
(a)
Financial assets (cont’d)
Subsequent measurement
The subsequent measurement of financial assets depends on their classification as follows:
(a)
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss include financial assets held for trading. Financial
assets are classified as held for trading if they are acquired for the purpose of selling or repurchasing
in the near term. This category includes derivative financial instruments entered into by the Group.
Derivatives, including separated embedded derivatives are also classified as held for trading.
Subsequent to initial recognition, financial assets at fair value through profit or loss are measured at
fair value. Any gains or losses arising from changes in fair value of the financial assets are recognised
in profit or loss. Net gains or net losses on financial assets at fair value through profit or loss include
exchange differences, interest and dividend income.
Derivatives embedded in host contracts are accounted for as separate derivatives and recorded at fair
value if their economic characteristics and risks are not closely related to those of the host contracts and
the host contracts are not measured at fair value with changes in fair value recognised in profit or loss.
These embedded derivatives are measured at fair value with changes in fair value recognised in profit
or loss. Reassessment only occurs if there is a change in the terms of the contract that significantly
modifies the cash flows that would otherwise be required.
(b)
Loans and receivables
Non-derivative financial assets with fixed or determinable payments that are not quoted in an active
market are classified as loans and receivables. Subsequent to initial recognition, loans and receivables
are measured at amortised cost using the effective interest method, less impairment. Gains and losses
are recognised in profit or loss when the loans and receivables are de-recognised or impaired, and through
the amortisation process.
De-recognition
A financial asset is de-recognised when the contractual right to receive cash flows from the asset has expired.
On de-recognition of a financial asset in its entirety, the difference between the carrying amount and the sum
of the consideration received and any cumulative gain or loss that had been recognised in other comprehensive
income is recognised in profit or loss.
Regular way purchase or sale of a financial asset
All regular way purchases and sales of financial assets are recognised or de-recognised on the trade date i.e.,
the date that the Group commits to purchase or sell the asset. Regular way purchases or sales are purchases
or sales of financial assets that require delivery of assets within the period generally established by regulation
or convention in the marketplace concerned.
