3 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
3.5 Financial instruments (continued)
(i) Non-derivative financial assets (continued)
Loans and receivables
Loans and receivables are financial assets with fixed or determinable payments that are not quoted in an
active market. Such assets are recognised initially at fair value plus any directly attributable transaction
costs. Subsequent to initial recognition, loans and receivables are measured at amortised cost using the
effective profit rate method, less any impairment losses.
Loans and receivables comprise cash and cash equivalents and trade and other receivables.
Cash and cash equivalents comprise cash at bank and short-term deposits with financial institutions that
are subject to an insignificant risk of changes in their fair value.
(ii) Non-derivative financial liabilities
The Group initially recognises debt securities issued and subordinated liabilities on the date that they are
originated. All other financial liabilities are initially recognised on the trade date, which is the date that the
Group becomes a party to the contractual provisions of the instrument.
The Group derecognises a financial liability when its contractual obligations are discharged, cancelled
or expire.
Financial assets and liabilities are offset and the net amount presented in the Statement of Financial
Position when, and only when, the Group has a legal right to offset the amounts and intends either to
settle on a net basis or to realise the asset and settle the liability simultaneously.
The Group classifies non-derivative financial liabilities into the other financial liabilities category.
Such financial liabilities are recognised initially at fair value plus any directly attributable transaction
costs. Subsequent to initial recognition, these financial liabilities are measured at amortised cost using the
effective profit rate method.
Other financial liabilities comprise borrowings and trade and other payables.
(iii) Derivative financial instruments
The Group holds derivative financial instruments to economically hedge its profit rate risk exposure.
Derivatives are recognised initially at fair value; any attributable transaction costs are recognised in the
Statement of Total Return as incurred. Subsequent to initial recognition, derivatives are measured at fair
value, and changes therein are accounted for as described below.
Separable embedded derivatives
Changes in the fair value of separated embedded derivatives are recognised immediately in the Statement
of Total Return.
Year ended 31 December 2014
NOTES TO THE FINANCIAL STATEMENTS
SABANA REIT
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ANNUAL REPORT 2014
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