notes to the consolidated financial statements - Sacombank

Gains or losses from disposal of trading securities are recognised in the consolidated income statement and are reported
on a net basis. Cost of securities disposed is determined by using the weighted average method.
For debt securities acquired at discount or premium, the discount or premium is allocated over the holding period of these
securities
(ii) Available-for-sale securities
Available-for-sale securities are those intended to be held for an indefinite period of time, which may be sold in response to
needs for liquidation or changes in interest rates, exchange rates or equity prices.
Available-for-sale securities are initially stated at cost of acquisition. Subsequently, they are measured at cost less
provision. Provision is made for available-for-sale securities eligible for being freely traded in the market and where there
is a diminution in value of these securities.
Gains or losses from disposal of available-for-sale securities are recognised in the consolidated income statement and are
reported on a net basis. Cost of securities disposed is determined by using the weighted average method.
For debt securities acquired at discount or premium, the discount or premium is allocated over the holding period of these
securities
(iii) Held-to-maturity securities
Held-to-maturity debt securities are those securities with fixed or determinable payment and fixed maturities that the
Group’s management has the positive intention and ability to hold to maturity.
Held-to-maturity securities are initially stated at cost of acquisition. Subsequently, they are measured at cost less provision.
Provision is required if there is evidence of a long-term decline in the value of the securities or in the case where the Group
cannot recover its investments.
Post-acquisition interest income of held-to-maturity securities is recognised in the consolidated income statement on an
accruals basis. Pre-acquisition interest income of held-to-maturity securities is deducted against the cost of acquisition.
For debt securities acquired at discount or premium, the discount or premium is allocated over the holding period of these
securities
(iv) Other long-term investments
Other long-term investments comprise shareholding of less than 20% in investees. These investments are initially stated at
cost of acquisition. Provision is made where there is a diminution in value of these investments.
Dividends are recognised in the consolidated income statement when the Group’s right to receive payment is established
ANNUAL REPORT 2011 104