FORGING AHEAD - Tradewinds Plantation Berhad

4. SIGNIFICANT ACCOUNTING POLICIES (continued)
4.11 Financial instruments (continued)
(a) Financial assets (continued)
A financial asset is derecognised when the contractual right to receive cash flows from the financial asset has
expired. On derecognition of a financial asset in its entirety, the difference between the carrying amount and
the sum of consideration received (including any new asset obtained less any new liability assumed) and any
cumulative gain or loss that had been recognised directly in other comprehensive income shall be recognised in
profit or loss.
A regular way purchase or sale is a purchase or sale of a financial asset under a contract whose terms require
delivery of the asset within the time frame established generally by regulation or marketplace convention.
(b) Financial liabilities
Financial instruments are classified as liabilities or equity in accordance with the substance of the contractual
arrangement. A financial liability is classified into the following two categories after initial recognition for the
purpose of subsequent measurement:
(i) Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss comprise financial liabilities that are held for trading,
derivatives (both, freestanding and embedded) and financial liabilities that were specifically designated into
this classification upon initial recognition.
Subsequent to initial recognition, financial liabilities classified as fair value through profit or loss are
measured at fair value. Any gains or losses arising from changes in the fair value of financial liabilities
classified as fair value through profit or loss are recognised in profit or loss. Net gains or losses on financial
liabilities classified as fair value through profit or loss exclude foreign exchange gains and losses, interest
and dividend income. Such income is recognised separately in profit or loss as components of other income
or other operating losses.
(ii) Other financial liabilities
FINANCIAL STATEMENTS
Financial liabilities classified as other financial liabilities comprise non-derivative financial liabilities that are
neither held for trading nor initially designated as fair value through profit or loss.
Subsequent to initial recognition, other financial liabilities are measured at amortised cost using the effective
interest method. Gains or losses on other financial liabilities are recognised in profit or loss when the
financial liabilities are derecognised and through the amortisation process.
TRADEWINDS PLANTATION BERHAD
Annual Report 2010
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