Maxis Berhad | Annual Report 2012

Maxis Berhad // Annual Report 2012 111 FINANCIAL STATEMENTS CORPORATE GOVERNANCE ANALYSIS OF SHAREHOLDINGS OTHER INFORMATION ANNUAL GENERAL MEETING 3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (f) Financial instruments (continued) (i) Classification and measurement (continued) Financial assets (continued) Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Financial assets in this category are initially recognised at fair value plus transaction costs and subsequently carried at amortised cost using the effective interest method. Changes in the carrying value of these assets are recognised in the income statement. The Group’s and the Company’s loans and receivables comprise receivables (including inter-companies and related parties balances), cash and cash equivalents in the statements of financial position. Available-for-sale Available-for-sale financial assets are non-derivatives that are either designated in this category or not classified in any of the other categories. Financial assets in this category are initially recognised at fair value plus transaction costs and subsequently, at fair value. Any gains or losses from changes in fair value of the financial assets are recognised in other comprehensive income, except that impairment losses, foreign exchange gains and losses on monetary instruments, interest and dividends are recognised in the income statement. The cumulative gain or loss previously recognised in other comprehensive income is reclassified from equity to the income statement as a reclassification adjustment when the financial asset is derecognised. Investments in equity instruments for which the fair value cannot be reliably measured are recognised at cost less impairment loss. The Group’s available-for-sale financial asset comprises investment in unquoted shares. Financial liabilities The Group and the Company classify their financial liabilities in the following categories: at fair value through profit or loss, other financial liabilities and financial guarantee contracts. Management determines the classification of financial liabilities at initial recognition. The Group and the Company do not hold any financial liabilities carried at fair value through profit or loss (except for derivatives that are designated as effective hedging instruments) and financial guarantee contracts. See accounting policy Note 3(h) on derivative financial instruments and hedging activities. Other financial liabilities are non-derivative financial liabilities. Other financial liabilities are initially recognised at fair value plus transaction costs and subsequently carried at amortised cost using the effective interest method. Changes in the carrying value of these liabilities are recognised in the income statement. The Group’s and the Company’s other financial liabilities comprise payables (including inter-companies and related parties balances) and borrowings in the statements of financial position. Financial liabilities are classified as current liabilities; except for maturities greater than 12 months after the reporting date, in which case they are classified as non-current liabilities. (ii) Recognition of financial assets and financial liabilities Financial assets and financial liabilities are recognised when the Group and the Company become party to the contractual provisions of the instrument.