NOTES TO FINANCIAL STATEMENTS
30 June 2015
Karin Technology Holdings Limited
Annual Report 2015
66
2.4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(continued)
INVESTMENTS AND OTHER FINANCIAL ASSETS
Initial recognition and measurement
Financial assets are classified, at initial recognition, as financial assets at fair value through profit or loss and
loans and receivables, as appropriate. When financial assets are recognised initially, they are measured at fair
value plus transaction costs that are attributable to the acquisition of the financial assets, except in the case of
financial assets recorded at fair value through profit or loss.
All regular way purchases and sales of financial assets are recognised on the trade date, that is, the date that the
Group commits to purchase or sell the asset. Regular way purchases or sales are purchases or sales of financial
assets that require delivery of assets within the period generally established by regulation or convention in the
marketplace.
Subsequent measurement
The subsequent measurement of financial assets depends on their classification as follows:
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss include financial assets held for trading and financial assets
designated upon initial recognition as at fair value through profit or loss. Financial assets are classified as held for
trading if they are acquired for the purpose of sale in the near term. Derivatives, including separated embedded
derivatives, are also classified as held for trading unless they are designated as effective hedging instruments as
defined by IAS 39.
Financial assets at fair value through profit or loss are carried in the statement of financial position at fair value
with positive net changes in fair value presented as “Other income and gains, net” and negative net changes in
fair value presented as “Other expenses, net” in profit or loss. These net fair value changes do not include any
dividends or interest earned on these financial assets, which are recognised in accordance with the policy set
out for “Revenue recognition” below.
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted
in an active market. After initial measurement, such assets are subsequently measured at amortised cost using
the effective interest rate method less any allowance for impairment. Amortised cost is calculated by taking
into account any discount or premium on acquisition and includes fees or costs that are an integral part of the
effective interest rate. The effective interest rate amortisation is included in “Other income and gains, net” in
profit or loss. The loss arising from impairment is recognised in profit or loss in “Finance costs” for loans and in
“Other expenses, net” for receivables.
