Annual Report 2012 - Dialog

Annual Report 2012 l Dialog Axiata PLC l 65
contract. As a practical expedient, the Company and the Group may measure impairment on the basis of an instrument’s
fair value using an observable market price.
If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an
event occurring after the impairment was recognised, the reversal of the previously recognised impairment loss is recognised
in the statement of comprehensive income.
(ii) Assets classified as AFS
The Company and the Group assess at the end of each reporting period whether there is objective evidence that a financial
asset or a group of financial assets is impaired.
For debt securities, the Company and the Group use criteria and measurement of impairment loss applicable for ‘assets
carried at amortised cost’ above. If, in a subsequent period, the fair value of a debt instrument classified as AFS increases
and the increase can be objectively related to an event occurring after the impairment loss was recognised in the statement
of comprehensive income, the impairment loss is reversed through the statement of comprehensive income.
In the case of equity securities classified as AFS, 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 AFS financial assets, the cumulative loss that had been recognised
directly in equity is removed from equity and recognised in the statement of comprehensive income. The amount of
cumulative loss that is reclassified to the statement of comprehensive income is the difference between the acquisition
cost and the current fair value, less any impairment loss on that financial asset previously recognised in the statement of
comprehensive income. Impairment losses recognised in the statement of comprehensive income on equity instruments
classified as AFS are not reversed through the statement of comprehensive income.
(e) De-recognition
Financial assets are de-recognised when the rights to receive cash flows from the investments have expired or have been
transferred and the Company and the Group have transferred substantially all risks and rewards of ownership.
(f) Offsetting financial instruments
Financial assets and liabilities are offset and the net amount presented in the statement of financial position when there is
a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis, or realise the
asset and settle the liability simultaneously.
(g) Derivative financial instruments and hedging activities
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently
re-measured at their fair value. The method of recognising the resulting gain or loss depends on whether the derivative is
designated as a hedging instrument, and if so, the nature of the item being hedged. The Company and the Group designate
certain derivatives as either:
(i) Hedges of the fair value of recognised assets or liabilities or a firm commitment (fair value hedge);
(ii) Hedges of a particular risk associated with a recognised asset or liability or a highly probable forecast transaction
(cash flow hedge); or
(iii) Hedges of a net investment in a foreign operation (net investment hedge).