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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)
2.12
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:
(i)
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.
(ii)
Financial liabilities at amortised cost
After initial recognition, financial liabilities that are not carried at fair value through profit and 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 derecognised, 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.
(c)
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.
