AL-SALAM REIT ANNUAL REPORT 2018

AL-SALĀM REIT ANNUAL REPORT 2018 125 Accounting policies applied until 31 December 2017 (i) Classiication Until 31 December 2017, the Group and the Fund classiied their inancial assets in the following categories: i. inancial assets at fair value through proit or loss, ii. loans and receivables, iii. held-to-maturity investments, and iv. available-for-sale inancial assets (“AFS”) The classiication depended on the purpose for which the investments were acquired. Management determined the classiication of its investments at initial recognition and, in the case of assets classiied as held-to-maturity, re-evaluated this designation at the end of each reporting period. Financial assets at Fair Value through Profit or Loss (“FVTPL”) The Group and the Fund classiied their inancial assets at fair value through proit or loss if they are acquired principally for the purpose of selling in the short term, i.e. are held for trading. They are presented as current assets if they are expected to be sold within 12 months after the end of the reporting period; otherwise they are presented as non-current assets. Loans and receivables Loans and receivables are non-derivative inancial assets with ixed or determinable payments that are not quoted in an active market. If collection of the amounts is expected in one year or less they are classiied as current assets. If not, they are presented as non-current assets. The Group’s and the Fund’s loans and receivables comprise ‘trade and other receivables’, ‘ixed deposits with licensed banks’, ‘cash and bank balances’, and ‘amount due from related companies’ in the statements of inancial position. Held-to-maturity financial assets Held-to-maturity inancial assets are non-derivative quoted inancial assets with ixed or determinable payments and ixed maturities that the Group’s and the Fund’s management have the positive intention and ability to hold to maturity. If the Group and the Fund were to sell other than an insigniicant amount of held-to-maturity inancial assets, the whole category would be tainted and reclassiied as AFS. Held-to-maturity inancial assets are included in non-current assets, except for those with maturities less than 12 months from the end of the reporting period, which are classiied as current assets. Available-for-sale financial assets (“AFS”) AFS inancial assets are non-derivatives that are either designated in this category or not classiied in any of the other categories. They are included in non-current assets unless the investment matures or management intends to dispose of it within 12 months of the end of the reporting period. (ii) Reclassiication The Group and Fund may choose to reclassify a non-derivative trading inancial asset out of the held for trading category if the inancial asset is no longer held for the purpose of selling it in the near term. Financial assets other than loans and receivables are permitted to be reclassiied out of the held for trading category only in rare circumstances arising from a single event that is unusual and highly unlikely to recur in the near term. In addition, the Group and the Fund may choose