Notes to the financial statements Year ended 31 December 2024 3. MATERIAL ACCOUNTING POLICIES (continued) (c) Financial instruments (continued) (ii) Classification and measurement (continued) Financial assets at amortised cost Financial assets at amortised cost comprise non-trade amounts due from subsidiaries, trade and other receivables (excluding prepayments), and cash and cash equivalents. Initial measurement A financial asset at amortised cost is initially measured at its fair value plus, or minus, transaction costs that are directly attributable to its acquisition. A trade receivable without a significant financing component is initially measured at the transaction price. Subsequent measurement Financial assets at amortised cost are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are subsequently measured at amortised cost. Interest income from these financial assets is included in interest income using the effective interest rate method. Any gain or loss on derecognition is recognised in the statement of total return. Non-derivative financial liabilities The Group classifies non-derivative financial liabilities under the other financial liabilities category. Such financial liabilities are initially measured at fair value less directly attributable transaction costs. These financial liabilities are subsequently measured at amortised cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognised in the statement of total return. Other financial liabilities comprise trade and other payables, security deposits and interest-bearing borrowings. (iii) Derecognition Financial assets The Group derecognises a financial asset when: • the contractual rights to the cash flows from the financial asset expire; or • it transfers the rights to receive the contractual cash flows in a transaction in which either: – substantially all of the risks and rewards of ownership of the financial asset are transferred; or – the Group neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset. Transferred assets are not derecognised when the Group enters into transactions whereby it transfers assets recognised in its statement of financial position, but retains either all or substantially all of the risks and rewards of the transferred assets. 107 Annual Report 2024
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