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PERENNIAL REAL ESTATE HOLDINGS LIMITED
Annual Report 2015
NOTES TO THE FINANCIAL STATEMENTS
3 SIGNIFICANT ACCOUNTING POLICIES
(continued)
3.3 Financial instruments
(continued)
(i)
Non-derivative financial assets (continued)
Loans and receivables
Loans and receivables are financial assets with fixed or determinable payments that are not quoted in an active
market. Such assets are recognised initially at fair value plus any directly attributable transaction costs. Subsequent
to initial recognition, loans and receivables are measured at amortised cost using the effective interest method, less
any impairment losses.
Loans and receivables comprise cash and cash equivalents, and trade and other receivables, excluding prepayments.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances and short-term deposits with maturities of three months or less
from the date of acquisition that are subject to an insignificant risk of changes in their fair value, and are used by the
Group in the management of its short-term commitments.
Available-for-sale financial assets
Available-for-sale financial assets are non-derivative financial assets that are designated as available for sale or are
not classified in any other categories of financial assets. Available-for-sale financial assets are recognised initially at
fair value plus any directly attributable transaction costs. Subsequent to initial recognition, they are measured at fair
value and changes therein, other than impairment losses, are recognised in OCI and presented in the fair value
reserve in equity. When an investment is derecognised, the gain or loss accumulated in equity is reclassified to profit
or loss.
Available-for-sale financial assets comprise equity securities.
(ii)
Non-derivative financial liabilities
The Group initially recognises debt securities issued and subordinated liabilities on the date that they are originated.
Financial liabilities for contingent consideration payable in a business combination are recognised at the date of
acquisition. All other financial liabilities (including liabilities designated at fair value through profit or loss) are
recognised initially on the trade date, which is the date that the Group becomes a party to the contractual provisions
of the instrument.
The Group derecognises a financial liability when its contractual obligations are discharged, cancelled or expire.
Financial assets and liabilities are offset and the net amount presented in the statement of financial position when,
and only when, the Group has a legal right to offset the amounts and intends either to settle on a net basis or to
realise the asset and settle the liability simultaneously.
The Group classifies non-derivative financial liabilities into the other financial liabilities category. Such financial
liabilities are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial
recognition, these financial liabilities are measured at amortised cost using the effective interest method.
Other financial liabilities comprise loans and borrowings, junior bonds, redeemable preference shares and trade and
other payables, excluding deferred income and advance rental received.
