Maxis Berhad
Annual Report 2014
102
Notes to the
Financial Statements
31 December 2014
3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(e) Investments in subsidiaries
In the Company’s separate financial statements, investments in subsidiaries are stated at cost plus the fair value of share options
granted and shares acquired, over the Company’s equity instruments for employees (including full-time executive directors) of
the subsidiaries during the vesting period, deemed as capital contribution. See accounting policy Note 3(t)(iv) on share-based
compensation benefits. Where an indication of impairment exists, the carrying amount of the investment is assessed and written
down immediately to its recoverable amount. See accounting policy Note 3(g)(i) on impairment of non-financial assets.
(f) Financial instruments
A financial instrument is any contract that gives rise to both a financial asset of one enterprise and a financial liability or equity
instrument of another enterprise.
A financial asset is any asset that is cash, a contractual right to receive cash or another financial asset from another enterprise, a
contractual right to exchange financial instruments with another enterprise under conditions that are potentially favourable, or an
equity instrument of another enterprise.
A financial liability is any liability that is a contractual obligation to deliver cash or another financial asset to another enterprise, or
to exchange financial instruments with another enterprise under conditions that are potentially unfavourable.
(i) Classification and measurement
Financial assets
The Group and the Company classify their financial assets in the following categories: at fair value through profit or loss, held-
to-maturity, loans and receivables, and available-for-sale. The classification depends on the purpose for which the financial
assets were acquired. Management determines the classification of financial assets at initial recognition.
The Group and the Company do not hold any financial assets carried at fair value through profit or loss (except for derivatives
that are designated as effective hedging instruments) and held-to-maturity. See accounting policy Note 3(h) on derivative
financial instruments and hedging activities.
Financial assets are classified as current assets; except for maturities greater than 12 months after the reporting date, in which
case they are classified as non-current assets.
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
statement of profit or loss.
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 statement of financial position.
