Annual Report 2011 - QuamIR

Notes to the Consolidated Financial StatementsFor the year ended 31 March 20113. Significant Accounting Policies (continued)Financial instruments (continued)Financial assets (continued)Available-for-sale financial assets (AFS financial assets)AFS financial assets are non-derivatives that are either designated as available-for-sale or are not classifiedas (a) loans and receivables, (b) held-to-maturity investments or (c) financial assets at FVTPL.AFS financial assets are measured at fair value at the end of the reporting period. Changes in fair value arerecognized in other comprehensive income and accumulated under the heading of investments revaluationreserve. Where the financial asset is disposed of or is determined to be impaired, the cumulative gainor loss previously accumulated in the investments revaluation reserve is reclassified to profit or loss(see the accounting policy in respect of impairment loss on financial assets below).AFS equity investments that do not have a quoted market price in an active market and whose fair valuecannot be reliably measured and derivatives that are linked to and must be settled by delivery of suchunquoted equity investments are measured at cost less any identified impairment losses at the end of thereporting period (see the accounting policy in respect of impairment loss on financial assets below).Loans and receivablesLoans and receivables are non-derivative financial assets with fixed or determinable payments that arenot quoted in an active market. Loans and receivables (including trade and other receivables, amount duefrom a non-controlling interest of a subsidiary and bank balances and cash) are measured at amortizedcost using the effective interest method, less any impairment.Interest income is recognized by applying the effective interest rate, except for short-term receivableswhen the recognition of interest would be immaterial.Impairment of financial assetsFinancial assets, other than those at FVTPL, are assessed for indicators of impairment at the end ofeach reporting period. Financial assets are considered to be impaired when there is objective evidencethat, as a result of one or more events that occurred after the initial recognition of the financial asset,the estimated future cash flows of the investment have been affected.For AFS equity investments, a significant or prolonged decline in the fair value of the security belowits cost is considered to be objective evidence of impairment.Annual Report 201165