2012 Annual Report - ZTE

ZTE CORPORATIONNotes to Financial Statements(Prepared under Hong Kong Financial Reporting Standards)31 December 20122.4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)Investments and other financial assets (continued)Initial recognition and measurement (continued)All regular way purchases and sales of financial assets are recognised on the trade date, that is, the datethat the Group commits to purchase or sell the asset. Regular way purchases or sales are purchases orsales of financial assets that require delivery of assets within the period generally established by regulationor convention in the marketplace.Subsequent measurementThe subsequent measurement of financial assets depends on their classification as follows:Financial assets at fair value through profit or lossFinancial assets at fair value through profit or loss include financial assets held for trading and financial assetsdesignated upon initial recognition as at fair value through profit or loss. Financial assets are classified asheld for trading if they are acquired for the purpose of sale in the near term. Derivatives, including separatedembedded derivatives, are also classified as held for trading unless they are designated as effective hedginginstruments as defined by HKAS 39.Financial assets at fair value through profit or loss are carried in the statement of financial position at fairvalue with positive net changes in fair value presented as other income and gains and negative net changesin fair value presented as finance costs in the profit or loss. These net fair value changes do not include anydividends or interest earned on these financial assets, which are recognised in accordance with the policiesset out for “Revenue recognition” below.Financial assets designated upon initial recognition as at fair value through profit or loss are designated atthe date of initial recognition and only if the criteria under HKAS 39 are satisfied.338