84.
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)
(b)
Financial liabilities
Initial recognition and measurement
Financial liabilities are recognised when, and only when, the Group becomes a party to the contractual
provisions of the financial instrument. The Group determines the classification of its financial liabilities at
initial recognition.
All financial liabilities are recognised initially at fair value plus, in the case of financial liabilities not at fair value
through profit or loss, directly attributable transaction costs.
Subsequent measurement
The measurement of financial liabilities depends on their classification as follows:
(a)
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss includes financial liabilities held for trading.
Financial liabilities are classified as held for trading if they are acquired for the purpose of selling in the
near term. This category includes derivative financial instruments entered into by the Group that are not
designated as hedging instruments in hedge relationships. Separated embedded derivatives are also
classified as held for trading unless they are designated as effective hedging instruments.
Subsequent to initial recognition, financial liabilities 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 liabilities are recognised
in profit or loss.
The Group has not designated any financial liabilities upon initial recognition at fair value through profit
or loss.
(b)
Financial liabilities at amortised cost
After initial recognition, financial liabilities that are not carried at fair value through profit or loss are
subsequently measured at amortised cost using the effective interest method. Gains and losses are
recognised in profit or loss when the liabilities are de-recognised, and through the amortisation process.
De-recognition
A financial liability is de-recognised when the obligation under the liability is discharged or cancelled or expires. When
an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms
of an existing liability are substantially modified, such an exchange or modification is treated as a de-recognition of
the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is
recognised in profit or loss.
