NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 December 2015
79
ANNUAL REPORT 2015
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
2.30 FINANCIAL GUARANTEES
A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder
for a loss it incurs because a specified debtor fails to make payment when due in accordance with the terms of a debt
instrument.
Financial guarantees are initially recognised as a liability at fair value, adjusted for transaction costs that are directly attributable
to the issuance of the guarantee. Subsequent to initial recognition, financial guarantees are recognised as income in profit or
loss over the period of the guarantee. If it is probable that the liability will be higher than the amount initially recognised less
amortisation, the liability is recorded at the higher amount with the difference charged to profit or loss.
2.31 DE-RECOGNITION OF FINANCIAL ASSETS AND LIABILITIES
(a)
Financial assets
A financial asset is de-recognised where the contractual right to receive cash flows from the assets 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.
(b)
Financial liabilities
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.
2.32 OFFSETTING OF FINANCIAL INSTRUMENTS
Financial assets and financial liabilities are offset and the net amount is presented in the balance sheets, when and only
when, there is a currently enforceable legal right to set off the recognised amounts and there is an intention to settle on a
net basis, or to realise the assets and settle the liabilities simultaneously.
2.33 TRANSFERS BETWEEN LEVELS OF THE FAIR VALUE HIERARCHY
Transfers between levels of the fair value hierarchy are deemed to have occurred on the date of the event or change in
circumstances that caused the transfers.
