Annual Report 2012 - singapore land limited

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58 Singapore Land Limited - Annual Report 2012 NOTES TO THE FINANCIAL STATEMENTS For the fi nancial year ended 31 December 2012 2. SIGNIFICANT ACCOUNTING POLICIES (continued) 2.11 Financial assets (continued) (a) Classification (continued) (ii) Loans and receivables Loans and receivables are non-derivative fi nancial assets with fi xed or determinable payments that are not quoted in an active market. They are presented as current assets, except for those expected to be realised later than 12 months after the statement of fi nancial position date which are presented as noncurrent assets. Loans and receivables are presented as “trade and other receivables” and “cash and cash equivalents” on the statement of fi nancial position. (iii) Held-to-maturity fi nancial assets Held-to-maturity fi nancial assets are non-derivative fi nancial assets with fi xed or determinable payments and fi xed maturities that the Group’s management has the positive intention and ability to hold to maturity. If the Group were to sell other than an insignifi cant amount of held-to-maturity fi nancial assets, the whole category would be tainted and reclassifi ed as available-for-sale. They are presented as non-current assets, except for those maturing within 12 months after the statement of fi nancial position date which are presented as current assets. (iv) Available-for-sale fi nancial assets Available-for-sale fi nancial assets are non-derivatives that are either designated in this category or not classifi ed in any of the other categories. They are presented as non-current assets unless the investment matures or management intends to dispose of the assets within 12 months after the statement of fi nancial position date. (b) Recognition and derecognition Regular way purchases and sales of fi nancial assets are recognised on trade-date – the date on which the Group commits to purchase or sell the asset. Financial assets are derecognised when the rights to receive cash fl ows from the fi nancial assets have expired or have been transferred and the Group has transferred substantially all risks and rewards of ownership. On disposal of a fi nancial asset, the difference between the carrying amount and the sale proceeds is recognised in the income statement. Any amount previously recognised in other comprehensive income relating to that asset is reclassifi ed to the income statement.
Singapore Land Limited - Annual Report 2012 59 NOTES TO THE FINANCIAL STATEMENTS For the fi nancial year ended 31 December 2012 2. SIGNIFICANT ACCOUNTING POLICIES (continued) 2.11 Financial assets (continued) (c) Initial measurement Financial assets are initially recognised at fair value plus transaction costs except for fi nancial assets at fair value through profi t or loss, which are recognised at fair value. Transaction costs for fi nancial assets at fair value through profi t and loss are recognised immediately as expenses. (d) Subsequent measurement Available-for-sale fi nancial assets and fi nancial assets at fair value through profi t or loss are subsequently carried at fair value. Loans and receivables and held-to-maturity fi nancial assets are subsequently carried at amortised cost using the effective interest method. Changes in the fair values of fi nancial assets at fair value through profi t or loss including the effects of currency translation, interest and dividends, are recognised in the income statement when the changes arise. Interest and dividend income on available-for-sale fi nancial assets are recognised separately in income statement. Changes in the fair values of available-for-sale debt securities (i.e. monetary items) denominated in foreign currencies are analysed into currency translation differences on the amortised cost of the securities and other changes; the currency translation differences are recognised in the income statement and the other changes are recognised in other comprehensive income and accumulated in the fair value reserve. Changes in fair values of available-for-sale equity securities (i.e. non-monetary items) are recognised in other comprehensive income and accumulated in the fair value reserve, together with the related currency translation differences. (e) Impairment The Group assesses at each statement of fi nancial position date whether there is objective evidence that a fi nancial asset or a group of fi nancial assets is impaired and recognises an allowance for impairment when such evidence exists. (i) Loans and receivables / Held-to-maturity fi nancial assets Signifi cant fi nancial diffi culties of the debtor, probability that the debtor will enter bankruptcy and default or signifi cant delay in payments are objective evidence that these fi nancial assets are impaired. The carrying amount of these assets is reduced through the use of an impairment allowance account which is calculated as the difference between the carrying amount and the present value of estimated future cash fl ows, discounted at the original effective interest rate. When the asset becomes uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are recognised against the same line item in the income statement.
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Incorporated in the Republic of Sin
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Annual Report 2012 - singapore land limited

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