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2.
Summary of significant accounting policies (cont’d.)
2.12 Financial assets
2.12.1 Classification
The Group classifies its financial assets in the following categories: at fair value through profit or loss, loans and
receivables and available-for-sale. The classification depends on the purpose for which the financial assets were
acquired. Management determines the classification at initial recognition.
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss are financial assets held for trading. A financial asset is classified
in this category if it is acquired or incurred principally for the purpose of selling or repurchasing it in the near term.
Derivatives are also categorised as held for trading unless they are designated as hedges (see Note 2.15). Assets in this
category are classified as current assets if expected to be settled within 12 months; otherwise, they are classified as
non-current.
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in
an active market. They are included in current assets, except for maturities greater than 12 months after the end of the
reporting period. These are classified as non-current assets. The Group’s loans and receivables comprise ‘trade and
other receivables’, ‘amounts due from associates, joint ventures and related companies’ and ‘deposits, cash and bank
balances’ in the statements of financial position.
Available-for-sale financial assets
Available-for-sale financial assets are non-derivatives that are either designated in this category or not classified in any
of the other categories. They are included in non-current assets unless the investment matures or management intends
to dispose of within 12 months of the end of the reporting period.
2.12.2 Recognition and initial measurement
Regular purchases and sales of financial assets are recognised on the trade date, the date on which the Group commits
to purchase or sell the asset.
Financial assets are initially recognised at fair value plus transaction costs for all financial assets not carried at fair value
through profit or loss. Financial assets carried at fair value through profit or loss are initially recognised at fair value, and
transaction costs are expensed in profit or loss.
2.12.3 Subsequent measurement - gains and losses
Available-for-sale financial assets and financial assets at fair value through profit or loss are subsequently carried at fair
value. Loans and receivables are subsequently carried at amortised cost using the effective interest method.
Changes in the fair values of financial assets at fair value through profit or loss, including the effects of currency
translation, interest and dividend income are recognised in profit or loss in the period in which the changes arise.
Changes in the fair value of available-for-sale financial assets are recognised in other comprehensive income, except
for impairment losses (see accounting policy Note 2.12) and foreign exchange gains and losses on monetary assets. The
exchange differences on monetary assets are recognised in the income statement, whereas exchange differences on
non-monetary assets are recognised in other comprehensive income as part of fair value change.
NOTES TO THE
FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017
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AirAsia Berhad
REPORTS AND FINANCIAL STATEMENTS
260