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SUNNINGDALE TECH LTD
ANNUAL REPORT 2014
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 December 2014
NOTES TO THE FINANCIAL STATEMENTS
2.
Summary of significant accounting policies (cont’d)
2.11
Joint venture and associate (cont’d)
After application of the equity method, the Group determines whether it is necessary to recognise an additional impairment loss
on the Group’s investment in associate or joint ventures. The Group determines at the end of each reporting period whether
there is any objective evidence that the investment in the associate or joint venture is impaired. If this is the case, the Group
calculates the amount of impairment as the difference between the recoverable amount of the associate or joint venture and
its carrying value and recognises the amount in profit or loss.
The financial statements of the associate and joint venture are prepared as the same reporting date as the Company. Where
necessary, adjustments are made to bring the accounting policies in line with those of the Group.
2.12
Financial instruments
(a)
Financial assets
Initial recognition and measurement
Financial assets 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 assets at initial recognition.
When financial assets are recognised initially, they are measured at fair value, plus, in the case of financial assets not at
fair value through profit or loss, directly attributable transaction costs.
Subsequent measurement
The subsequent measurement of financial assets depends on their classification as follows:
(i)
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.
The Group has not designated any financial assets upon initial recognition at fair value through profit or loss.
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 the 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 held for 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.
