MISC Annual Report 2017

NOTES TO THE FINANCIAL STATEMENTS 185 Financial Statements 2. SIGNIFICANT ACCOUNTING POLICIES (CONT'D.) 2.3 Summary of significant accounting policies (cont'd.) (i) Financial assets (cont'd.) Subsequent measurement: The subsequent measurement of financial assets depends on their classification as follows: (i) Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss comprise financial assets that are held for trading, including derivatives (except for a derivative that is a financial guarantee contract or a designated and effective hedging instrument) and financial assets that are specifically designated into this category upon initial recognition. Financial assets, categorised as fair value through profit or loss are subsequently measured at their fair value, with gains or losses recognised in the income statement. The Group has not designated any financial assets as at fair value through profit or loss for the years ended 31 December 2017 and 31 December 2016. (ii) Loans and receivables Loans and receivables comprise debt instruments that are not quoted in an active market. Subsequent to initial recognition, financial assets categorised as loans and receivables are measured at amortised cost using the effective interest rate method. (iii) Held-to-maturity investments Held-to-maturity investments comprise debt instruments that are quoted in an active market and the Group has positive intention and ability to hold the assets to maturity. Subsequent to initial recognition, held-to-maturity investments are measured at amortised cost using the effective interest rate method. The Group did not have any held-to-maturity investments as at 31 December 2017 and 31 December 2016. (iv) Available-for-sale financial assets Available-for-sale financial assets comprise investment in equity and debt instruments that are not held for trading. Investments in equity instruments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured are measured at cost. Other financial assets categorised as available-for-sale are subsequently measured at fair value, with unrealised gains and losses recognised directly in other comprehensive income and accumulated under available-for-sale reserve in equity until the investment is derecognised or determined to be impaired, at which time the cumulative gain or loss previously recorded in equity is reclassified to the income statement. The Group and the Corporation have designated their non-current investments as available-for-sale financial assets. All financial assets, except for those measured at fair value through profit or loss, are subject to review for impairment as described in Note 2.3(m).