74
STAMFORD LAND CORPORATION LTD
Notes to Financial Statements
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(xii)
Non-derivative financial assets (cont’d)
Subsequent measurement and impairment of financial assets (cont’d)
b.
Loans and receivables: Loans and receivables are non-derivative financial assets with fixed
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immediately or in the near term are not classified in this category. These assets are carried at
amortised cost using the effective interest method (except that short-duration receivables with
no stated interest rate are normally measured at original invoice amount unless the effect of
imputing interest would be significant) minus any reduction (directly or through the use of an
allowance account) for impairment or uncollectibility. Impairment charges are provided only
when there is objective evidence that an impairment loss has been incurred as a result of one or
more events that occurred after the initial recognition of the asset (a ‘loss event’) and that loss
event (or events) has an impact on the estimated future cash flows of the financial asset or group
of financial assets that can be reliably estimated. The methodology ensures that an impairment
loss is not recognised on the initial recognition of an asset. Losses expected as a result of future
events, no matter how likely, are not recognised. For impairment, the carrying amount of the
asset is reduced through use of an allowance account. The amount of the loss is recognised in
profit or loss. An impairment loss is reversed if the reversal can be related objectively to an event
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loss. Typically, the trade and other receivables are classified in this category.
c.
Available-for-sale financial assets: These are non-derivative financial assets that are designated
as available-for-sale on initial recognition or are not classified in one of the previous categories.
These assets are carried at fair value by reference to the transaction price or current bid
prices in an active market. If such market prices are not reliably determinable, management
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other reserves. Such reserves are reclassified to profit or loss when realised through disposal.
Impairment losses are recognised in profit or loss. When there is objective evidence that
the asset is impaired, the cumulative loss that had been recognised in other comprehensive
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classified as available-for-sale increases, it is reversed through other comprehensive income.
However, for debt instruments classified as available-for-sale, impairment losses recognised
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of the instrument can be objectively related to an event occurring after the recognition of
the impairment loss. They are classified as non-current assets unless management intends to
dispose of the investment within 12 months of the end of the reporting year. Typically, long-
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include subsidiaries, joint ventures, or associates.
