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Frontken Corporation Berhad (651020-T)
ANNUAL REPORT
2016
3.
SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
Financial Instruments (Cont’d)
(i)
Financial assets (Cont’d)
• Financial assets at fair value through profit or loss
Financial assets are classified as financial assets at fair value through profit or loss when the financial asset
is either held for trading or is designated to eliminate or significantly reduce a measurement or recognition
inconsistency that would otherwise arise. Derivatives are also classified as held for trading unless they are
designated as hedges.
Financial assets at fair value through profit or loss are stated at fair value, with any gains or losses arising on
remeasurement recognised in profit or loss. Dividend income from this category of financial assets is recognised
in profit or loss when the Group’s right to receive payment is established.
Financial assets at fair value through profit or loss could be presented as current assets or non-current assets.
Financial assets that are held primarily for trading purposes are presented as current assets whereas financial
assets that are not held primarily for trading purposes are presented as current assets or non-current assets
based on the settlement date.
• Held-to-maturity investments
As at the end of the reporting period, there were no financial assets classified under this category.
• Loans and receivables financial assets
Trade receivables and other receivables that have fixed or determinable payments that are not quoted in an
active market are classified as loans and receivables financial assets. Loans and receivables financial assets
are measured at amortised cost using the effective interest method, less any impairment loss. Interest income
is recognised by applying the effective interest rate, except for short-term receivables when the recognition of
interest would be immaterial.
The effective interest method is a method of calculating the amortised cost of a financial asset and of allocating
interest income over the relevant period. The effective interest rate is the rate that discounts estimated future
cash receipts (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 asset, or
(where appropriate) a shorter period, to the net carrying amount on initial recognition.
Loans and receivables financial assets are classified as current assets, except for those having settlement dates
later than 12 months after the reporting date which are classified as non-current assets.
• Available-for-sale financial assets
As at the end of the reporting period, there were no financial assets classified under this category.
(ii) Financial liabilities
• 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. Derivatives are also classified as held for trading unless they are designated as hedges.
Notes To The Financial Statements
(cont’d)