FORGING AHEAD - Tradewinds Plantation Berhad

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FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2010
4. SIGNIFICANT ACCOUNTING POLICIES (continued)
4.11 Financial instruments (continued)
(b) Financial liabilities (continued)
A financial liability is derecognised when, and only when, it is extinguished, i.e. when the obligation specified
in the contract is discharged or cancelled or expires. An exchange between an existing borrower and lender
of debt instruments with substantially different terms are accounted for as an extinguishment of the original
financial liability and the recognition of a new financial liability. Similarly, a substantial modification of the terms
of an existing financial liability is accounted for as an extinguishment of the original financial liability and the
recognition of a new financial liability.
The difference between the carrying amount of a financial liability extinguished or transferred to another party
and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in
profit or loss.
A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the
holder for a loss it incurs because a specified debtor fails to make payment when due in accordance with the
original or modified terms of a debt instrument.
(c) Equity
An equity instrument is any contract that evidences a residual interest in the assets of the Group and of the
Company after deducting all of its liabilities. Ordinary shares are classified as equity instruments.
Ordinary shares are recorded at the nominal value and proceeds in excess of the nominal value of shares issued,
if any, are accounted for as share premium. Both ordinary shares and share premium are classified as equity.
Transaction costs of an equity transaction are accounted for as a deduction from equity, net of any related income
tax benefit. Otherwise, they are charged to profit or loss.
Dividends to shareholders are recognised in equity in the period in which they are declared.
If the Company reacquires its own equity instruments, the consideration paid, including any attributable transaction
costs is deducted from equity as treasury shares until they are cancelled. No gain or loss is recognised in profit
or loss on the purchase, sale, issue or cancellation of the Company’s own equity instruments. Where such shares
are issued by resale, the difference between the sales consideration and the carrying amount is shown as a
movement in equity.
TRADEWINDS PLANTATION BERHAD
Annual Report 2010