Maxis Berhad | Annual Report 2013

Maxis Berhad | Annual Report 2013 92 3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (f) Financial instruments (continued) (i) Classification and measurement (continued) Financial assets (continued) 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 statement of profit or loss. The cumulative gain or loss previously recognised in other comprehensive income is reclassified from equity to the statement of profit or loss 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 statement of profit or loss. The Group’s and the Company’s other financial liabilities comprise payables (including inter-companies and related parties balances) and borrowings in the statement 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. (iii) Derecognition of financial assets and financial liabilities Financial assets are derecognised when the risks and rewards relating to the financial assets have expired or have been fully transferred or have been partially transferred with no control over the same. Financial liabilities are derecognised when the liability is either discharged, cancelled, has expired or has been restructured with substantially different terms. (iv) Offsetting of financial assets and financial liabilities Financial assets and financial liabilities are offset and the net amount reported in the statement of financial position when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis, or realise the asset and settle the liability simultaneously. NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2013 Continued