Annual Report 2012, PDF - Axiata Group Berhad - Investor Relations

NOTES TO THEFINANCIAL STATEMENTSFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2012 (CONTINUED)3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)(g) Financial assets (continued)(iv) Subsequent measurement – Impairment of financial assets (continued)(b) Assets classified as AFSThe Group and the Company assess at the end of the reporting period whether there is objectiveevidence that a financial asset or a group of financial assets is impaired.For debt securities, the Group and the Company uses criteria and measurement of impairment lossapplicable for ‘assets carried at amortised cost’ above.In the case of equity securities classified as AFS, in addition to the criteria for ‘assets carried atamortised cost’ above, a significant or prolonged decline in the fair value of the security below itscost is also considered as an indicator that the assets are impaired. If any such evidence existsfor AFS financial assets, the cumulative loss that had been recognised directly in equity is removedfrom equity and recognised in profit or loss. The amount of cumulative loss that is reclassified toprofit or loss is the difference between the acquisition cost and the current fair value, less anyimpairment loss on that financial asset previously recognised in profit or loss. Impairment lossesrecognised in profit or loss on equity instruments classified as AFS are not reversed through profitor loss.(v)De-recognitionFinancial assets are de-recognised when the rights to receive cash flows from the investments haveexpired or have been transferred and the Group and the Company have transferred substantially allrisks and rewards of ownership.Receivables that are factored out to banks and other financial institutions with recourse to the Groupand the Company are not derecognised until the recourse period has expired and the risks and rewardsof the receivables have been fully transferred. The corresponding cash received from the financialinstitutions is recorded as borrowings.(h) Offsetting financial instrumentsFinancial assets and liabilities are offset and the net amount presented in the statements of financial positionwhen there is a legally enforceable right to offset the recognised amounts and there is an intention to settleon a net basis, or realise the asset and settle the liability simultaneously.188