2009 Annual report - Nedbank Group Limited

• Other financial liabilitiesAll financial liabilities, other than those at fair value through profit and loss, are classified as other financial liabilitiesand are measured at amortised cost. The carrying amounts are disclosed in the notes to the financial statements. Theapproximation of the fair value of other financial liabilities have proven to be reasonably close to the carrying value ofsuch instruments and in terms of IFRS 7.29(a) the Group is not required to disclose the fair value of these instrumentsin the notes to the financial statements.• Held-to-maturity financial assetsHeld-to-maturity financial assets are non-derivative financial assets with fixed or determinable payments and fixedmaturity that the Group has the intent and ability to hold to maturity, other than those that meet the definition of loansand receivables or those that were designated as at fair value through profit or loss or available-for-sale. Held-tomaturityfinancial assets are measured at amortised cost, with interest income recognised in profit or loss.• Loans and receivablesLoans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted inan active market, other than those classified by the Group as at fair value through profit or loss or available-for-sale.Financial assets classified as loans and receivables are carried at amortised cost less any impairment, with interestincome recognised in profit or loss. The majority of the Group’s advances are included in the loans and receivablescategory. The carrying amounts are disclosed in the notes to the financial statements. The approximation of the fair valueof loans and receivables have proven to be reasonable close to the carrying value of such instruments and in terms of IFRS7.29(a) the Group is not required to disclose the fair value of these instruments in the notes to the financial statements.• Available-for-saleFinancial assets are classified as available-for-sale where the intention, origination and designation of the instrumentdo not fall within the ambit of the other financial asset classifications. Available-for-sale instruments are typicallyassets that are held for a longer period and in respect of which short-term fluctuations in value do not affect theGroup’s hold or sell decision. Available-for-sale financial assets are measured at fair value, with fair value gains andlosses recognised directly in other comprehensive income along with the associated deferred taxation. Any foreigncurrency translation gains and losses or interest revenue, measured on an effective-yield basis, are reclassified toprofit and loss as they arise. When available-for-sale equity instruments are determined to be impaired to the extentthat the fair value declines below its original cost, the resultant losses are recognised in profit or loss.(iv) Embedded derivativesAn embedded derivative arises when derivatives are a component of a financial instrument in such a way thatthe cash flows in respect of the instrument vary in a similar way to those in respect of a standalone derivative.Where the value of embedded derivatives can be reliably measured, embedded derivatives are accounted for separatelyat their fair value.Certain derivatives embedded in other financial and non-financial instruments, such as the conversion option in aconvertible bond, are treated as separate derivatives and recognised as such on a stand alone basis, when their risksand characteristics are not closely related to those of the host contract and the host contract is not carried at fair valuewith unrealised gains and losses reported in profit or loss.GROUP ANNUAL FINANCIAL STATEMENT S 77