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2.
Summary of significant accounting policies (cont’d.)
2.12 Financial assets (cont’d.)
2.12.4 Subsequent measurement - impairment of financial assets (cont’d.)
Assets classified as available-for-sale
The Group assesses at the end of the reporting period whether there is objective evidence that a financial asset or a
group of financial assets is impaired.
For debt securities, the Group uses criteria and measurement of impairment loss applicable for ‘assets carried at
amortised cost’ above.
In the case of equity securities classified as available-for-sale, in addition to the criteria for ‘assets carried at amortised
cost’ above, a significant or prolonged decline in the fair value of the security below its cost is also considered as an
indicator that the assets are impaired. If any such evidence exists for available-for-sale financial assets, the cumulative
loss that had been recognised directly in equity is removed from equity and recognised in profit or loss. The amount
of cumulative loss that is reclassified to profit or loss is the difference between the acquisition cost and the current
fair value, less any impairment loss on that financial asset previously recognised in profit or loss. Impairment losses
recognised in profit or loss on equity instruments classified as available-for-sale are not reversed through profit or loss.
2.12.5 Derecognition
Financial assets are derecognised when the rights to receive cash flows from the investments have expired or have been
transferred and the Group has transferred substantially all risks and rewards of ownership.
When available-for-sale financial assets are sold, the accumulated fair value adjustments recognised in other
comprehensive income are reclassified to the income statements.
2.13 Financial liabilities
2.13.1 Classification and measurement
The Group classifies its financial liabilities in the following categories: other financial liabilities. Management determines
the classification of financial liabilities at initial recognition.
The Group does not hold any financial liabilities carried at fair value through profit or loss (except for derivative financial
instruments). See accounting policy Note 2.15 on derivative financial instruments and hedging activities.
Other financial liabilities are non-derivative financial liabilities. Other financial liabilities are initially recognised at fair
value plus transaction costs that are directly attributable to the acquisition of the financial liability and subsequently
carried at amortised cost using the effective interest method. Changes in the carrying value of these liabilities are
recognised in the income statements.
The Group’s other financial liabilities comprise payables (including intercompanies and related parties’ balances) and
borrowings in the statement of financial position. Financial liabilities are classified as current liabilities; except for
maturities greater than 12 months after the reporting date, in which case they are classified as non-current liabilities.
2.13.2 Derecognition
Financial liabilities are derecognised when the liability is either discharged, cancelled, expired or has been restructured
with substantially different terms.
NOTES TO THE
FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017
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AirAsia Berhad
REPORTS AND FINANCIAL STATEMENTS
262