Annual Report
2015
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DAYANG ENTERPRISE HOLDINGS BHD
(712243-U)
77
2.
Significant accounting policies (cont’d)
(b) Financial instruments (cont’d)
(iii) Financial instrument categories and subsequent measurement (cont’d)
All financial assets, except for those measured at fair value through profit or loss, are subject to
review for impairment [see Note 2(h)(i)].
Financial liabilities
All financial liabilities, other than those categorised as fair value through profit or loss, are
subsequently measured at amortised cost.
Fair value through profit or loss category comprises financial liabilities that are derivatives
(except for a derivative that is a financial guarantee contract or a designated and effective
hedging instrument), contingent consideration in a business combination or financial liabilities
that are specifically designated into this category upon initial recognition.
Derivatives that are linked to and must be settled by delivery of equity instruments that do not
have a quoted price in an active market for identical instruments whose fair values otherwise
cannot be reliably measured are measured at cost.
Other financial liabilities categorised as fair value through profit or loss are subsequently
measured at their fair values with the gain or loss recognised in profit or loss.
(iii) Financial guarantee contracts
A financial guarantee contract is a contract that requires the issuer to make specified
payments to reimburse the holder for a loss it incurs because a specified debtor fails to make
payment when due in accordance with the original or modified terms of a debt instrument.
Fair value arising from financial guarantee contracts are classified as deferred income and
are amortised to profit or loss using a straight-line method over the contractual period or,
when there is no specified contractual period, recognised in profit or loss upon discharge of
the guarantee. When settlement of a financial guarantee contract becomes probable, an
estimate of the obligation is made. If the carrying value of the financial guarantee contract
is lower than the obligation, the carrying value is adjusted to the obligation amount and
accounted for as a provision.
(iv) Regular way purchase or sale of financial assets
A regular way purchase or sale is a purchase or sale of a financial asset under a contract whose
terms require delivery of the asset within the time frame established generally by regulation or
convention in the marketplace concerned.
A regular way purchase or sale of financial assets is recognised and derecognised, as
applicable, using trade date accounting. Trade date accounting refers to:
(a) the recognition of an asset to be received and the liability to pay for it on the trade date,
and
Notes to the
Financial Statements
(cont’d)
