Annual Report 2022 115 ABOUT US LEADERSHIP PERSPECTIVE SUSTAINABILITY GOVERNANCE FINANCIAL STATEMENTS Other Information Notes to the Financial Statements for the Financial Year Ended 31 March 2022 (Cont’d) 4. SIGNIFICANT ACCOUNTING POLICIES (CONT’D) 4.4 FINANCIAL INSTRUMENTS (CONT’D) (a) Financial Assets (Cont’d) Debt Instruments (Cont’d) (iii) Fair Value through Profit or Loss All other financial assets that do not meet the criteria for amortised cost or fair value through other comprehensive income are measured at fair value through profit or loss. The Group reclassifies debt instruments when and only when its business model for managing those assets change, if any. Equity Instruments All equity investments are subsequently measured at fair value with gains and losses recognised in profit or loss except where the Group has elected to present the subsequent changes in fair value in other comprehensive income and accumulated in the fair value reserve at initial recognition. The designation at fair value through other comprehensive income is not permitted if the equity investment is either held for trading or is designated to eliminate or significantly reduce a measurement or recognition inconsistency that would otherwise arise. Dividend income from this category of financial assets is recognised in profit or loss when the Group’s right to receive payment is established unless the dividends clearly represent a recovery of part of the cost of the equity investments. (b) Financial Liabilities (i) Financial Liabilities at Fair Value through Profit or Loss Fair value through profit or loss category comprises financial liabilities that are either held for trading or are designated to eliminate or significantly reduce a measurement or recognition inconsistency that would otherwise arise. The changes in fair value of these financial liabilities are recognised in profit or loss. (ii) Other Financial Liabilities Other financial liabilities are subsequently measured at amortised cost using the effective interest method. The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts), through the expected life of the financial liability or a shorter period (where appropriate). Financial liabilities are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.
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