165 / 244
Annual Report 2020
161
Notes to the Financial Statements
As at 31 March 2020
kumpulan Fima Berhad
(197201000167)(11817-V)
2.
Significant accounting policies (cont’d.)
2.4 Summary of significant accounting policies (cont’d.)
(r) Financial assets
Initial recognition and measurement
Financial assets are classified, at initial recognition, as subsequently measured at amortised cost, fair value
through profit or loss and fair value through other comprehensive income ("FVTOCI").
The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow
characteristics and the Group and the Company’s business model for managing them. With the exception
of trade receivables that do not contain a significant financing component or for which the Group and the
Company have applied the practical expedient, the Group and the Company initially measures a financial
asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs.
Trade receivables that do not contain a significant financing component or for which the Group and the
Company applied the practical expedient are measured at the transaction price determined under MFRS 15.
In order for a financial asset to be classified and measured at amortised cost, it needs to give rise to cash
flows that are ‘solely payments of principal and interest (“SPPI”) on the principal amount outstanding. The
assessment is referred to as the SPPI test and is performed at an instrument level.
The Group and the Company’s business model for managing financial assets refers to how it manages its
financial assets in order to generate cash flows. The business model determines whether cash flows will
result from collecting contractual cash flows, selling the financial assets, or both.
Purchases or sales of financial assets that require delivery of assets within a time frame established by
regulation or convention in the market place (regular way trades) are recognised on the trade date, i.e., the
date that the Group or the Company commits to purchase or sell the asset.
Subsequent measurement
For purposes of subsequent measurement, financial assets of the Group and of the Company are classified as
either:
-
Financial assets at amortised cost (debt instruments) ("AC");
-
Financial assets at fair value through profit or loss ("FVTPL");
-
Financial assets at FVTOCI with recycling of cumulative gains and losses (debt instruments); or
-
Financial assets designated at FVTOCI with no recycling of cumulative gains and losses upon
derecognition (equity instruments).